HK Stock Market Move | Chip stocks continue to decline, both SMIC and Hua Hong Semiconductor dropping more than 5%. The US export controls accelerate domestic semiconductor replacements.

Chip stocks continue to decline. As of the time of writing, Semiconductor Manufacturing International Corporation (00981) fell by 5.07% to HKD 70.15, HUA HONG SEMI (01347) fell by 4.91% to HKD 77.45, and SHANGHAI FUDAN (01385) fell by 2.78% to HKD 40.64. On the news front, on October 7, the U.S. House of Representatives' "special committee" issued an important report on the control of semiconductor exports to China, proposing nine recommendations to expand export restrictions. First Securities released a research report stating that the comprehensive export controls on semiconductors and rare earths by China and the U.S. signal that trade frictions have shifted to a confrontation over upstream core technologies and raw materials. The U.S. implementation of semiconductor export controls will accelerate the autonomy and controllability of the domestic industrial chain and achieve domestic substitution. In addition, Huatai released a research report stating that through the SEMICON WEST semiconductor industry annual conference forum, it was discovered that there are concerns about whether global AI has already become a bubble, but overall optimism remains high. Strong growth in token usage supports confidence in AI investments. The progress of TSMC's construction of a plant in the U.S. is smooth, but supporting facilities still need improvement and it is expected to maintain a high gross profit margin in the future with technological advantages. Advanced packaging is a major focus and may be a key technology for the continuation of Moore's Law in the AI era, offering investment opportunities for related foundries and equipment companies.