Chinese chip stocks surge as Huawei unveils plan to match leading chips with 1.4-nanometer technology

Global Market: Chinese AI and chip stocks rally after Huawei signals major tech leap

Chinese semiconductor stocks rallied sharply in Hong Kong after renewed optimism around a potential technological breakthrough by Huawei Technologies boosted investor sentiment towards the country's chip sector, Bloomberg reported. Shares of Semiconductor Manufacturing International Corp. and Hua Hong Semiconductor Ltd. surged more than 16% as trading resumed following a market holiday. On the mainland, chip-related counters had already gained momentum after a Huawei executive revealed at an industry conference that the company plans to begin producing 1.4-nanometer chips by 2031 using its proprietary "LogicFolding" technology. According to Bloomberg, the proposed manufacturing process could help Chinese semiconductor firms reduce the technology gap with global leaders such as Taiwan Semiconductor Manufacturing Co. The development is also being viewed as strategically important for China's artificial intelligence ambitions, especially as US restrictions continue to limit the country's access to advanced processors from Nvidia Corp.. Huawei's chip research team, led by He Tingbo, has proposed a new time-scaling approach designed to improve transistor data transmission speeds. The method differs from the traditional semiconductor industry focus under Moore's Law, which emphasizes shrinking transistor sizes to pack more components onto chips. Analysts believe the technology, if successfully commercialized, could potentially reduce reliance on cutting-edge chipmaking equipment supplied by ASML Holding NV. Bloomberg noted that this may enable Chinese firms to accelerate product launches while lowering production costs. The broader rally extended to other Chinese semiconductor firms listed in Hong Kong. GigaDevice Semiconductor Inc. climbed as much as 12%, while Montage Technology Co. gained around 6%. Despite the excitement, market experts cautioned that LogicFolding technology remains unproven at scale. Bloomberg reported that a key test will come later this year when Huawei launches Kirin mobile chips expected to be manufactured using the new process. Huawei has emerged as a central figure in China's push for technological self-reliance amid years of tightening US-led export restrictions targeting advanced semiconductor technologies. Investors increasingly see domestic innovation as critical for China's long-term competitiveness in artificial intelligence and high-performance computing.

Hong Kong Semi Stocks Surge After Huawei Says It Has Way to Match Leading Chips

Hong Kong semiconductor stocks surged after Huawei's new design approach raised hopes that Chinese chipmakers can close gap with foreign counterparts, despite U.S. export restrictions. Shares of SMIC, China's largest contract chip maker, rose as much as 16% early Tuesday while Hua Hong Semiconductor--the No. 2 foundry--advanced 14%. Hong Kong's Nasdaq-like Hang Seng Tech Index was up 1.8%. The gains came after Huawei on Monday said it has developed an approach that would allow it to make more-advanced chips without the use of equipment the U.S. has blocked it from accessing. The advancement could be "another DeepSeek moment," Bernstein analysts said, referring to the Chinese startup that made waves when it released an AI model that can perform on par with leading Western ones. Huawei's approach offers an alternative roadmap for local chip companies to keep progressing despite the U.S. trade curbs that have restricted China's access to advanced semiconductor technologies since 2022. If executed successfully, the leap forward will generate massive upside for China's semiconductor sector, Bernstein said, inspiring confidence among the industry in investing in building a local ecosystem. By 2031, Huawei expects to design high-end chips that match the transistor density of those manufactured with a 1.4-nanometer process seen as the next frontier for cutting-edge chips. Intel, Taiwan Semiconductor Manufacturing and Samsung Electronics are all aiming to mass-produce 1.4-nanometer semiconductors within the next few years. Semiconductor stocks listed in China pulled back on Tuesday as investors locked in the massive gains made the previous session following Huawei's announcement. The Hong Kong stock market was closed Monday for a holiday.