HK Stock Market Move | Chip stocks continue recent gains, high-end AI chip exports from the United States restricted, expected to promote the process of domestic substitution of AI chips.

Chip stocks continued their recent uptrend. As of the time of writing, Semiconductor Manufacturing International Corporation (00981) rose by 5.27% to HK$36.95; SOLOMON SYSTECH (02878) rose by 2.11% to HK$0.485; CE HUADA TECH (00085) rose by 1.65% to HK$1.23; HUA HONG SEMI (01347) rose by 1.57% to HK$22.7. On the news front, on January 13, the official website of the White House in the United States announced the "Interim Final Rule on the Proliferation of Artificial Intelligence," which restricts measures related to the use of high-end AI systems and computing capabilities by certain countries. GF Securities pointed out that the introduction of this policy will further strengthen the determination of the domestic AI industry chain to build autonomy and controllability. The development and application of large-scale AI models in China are expected to increasingly rely on domestic AI computing power, accelerating the process of building autonomous and controllable AI computing power domestically. Changes in the external environment are favorable for domestic AI chip companies such as Cambricon. Goldman Sachs previously released a report forecasting long-term growth in demand for the semiconductor industry in China. With the continually increasing domestic demand driven by geopolitical risks, Semiconductor Manufacturing International Corporation is expected to show a gradual upward trend. For the fourth quarter of 2024, the bank predicts SMIC's revenue to increase by 1% to $2.2 billion with a gross profit margin of 18.5%, aligning with the management's guidance range. While the recovery in demand varies across different end markets, the bank expects better support from the normalization of the industry's inventory in 2025.