HK Stock Market Move | Chip stocks rose in early trading. HUA HONG SEMI (01347) rose more than 3%, while Semiconductor Manufacturing International Corporation (00981) rose more than 2%.

Chip stocks rose in the morning session, as of press time, HUA HONG SEMI (01347) was up 3.64% at HK$79.75; SHANGHAI FUDAN (01385) was up 2.7% at HK$43.42; Semiconductor Manufacturing International Corporation (00981) was up 2.61% at HK$74.75. In terms of news, it was reported that the shortage of storage supply continues, with many storage backend packaging and testing factories such as Lisen, Nanmao, and Huatai receiving additional orders from major customers. Many manufacturers are planning to raise prices, with increases ranging from high single-digit percentages to double-digit percentages depending on different product lines and customers, starting as early as the end of this year and continuing into next year. Galaxy Securities believes that overall demand for AI remains strong, with TrendForce predicting a 24% year-on-year increase in capital expenditures for the world's eight largest CSP cloud service providers to $520 billion in 2026, driving demand for computing chips. There is ample room for domestic substitution in the storage chip cycle. Domestic storage factories will contribute mainly to next year's wafer fab capital expenditures, driving semiconductor equipment demand. Tianfeng points out that in 2025, the global semiconductor industry will continue its optimistic growth trend driven by AI, with downstream growth under AI in 2025. At the same time, the risk of supply chain interruptions and restructuring continues to rise, with ongoing promotion of domestic substitution. Companies in various sectors have reported strong performance previews for the second quarter, looking ahead to a strong season in the third quarter for semiconductors. It is recommended to focus on the design sector, storage/outsourcing/SoC/ASIC/CIS performance flexibility, equipment materials components, computing chips, and domestic substitution. Leading wafer foundry companies may raise prices, with a positive outlook for the second and third quarters, as continued changes in advanced processes catalyze growth.