By Chinese semiconductor stocks soared on Wednesday, driven by investor enthusiasm following the release of a new government guide that highlights significant progress in China’s domestic chip manufacturing capabilities.
The guide from China’s Ministry of Industry and Information Technology (MIIT) has fueled optimism about the country’s ability to enhance its semiconductor sector and reduce reliance on foreign technology.
Leading the charge, Shanghai Zhangjiang Hi-Tech Park Development and Shanghai Highly Group both hit the maximum allowable gain of 10%, while Sanhe Tongfei Refrigeration, benefiting from a broader trading range, surged by 20%.
The rally follows the MIIT’s encouragement to use key domestic semiconductor equipment, particularly focusing on the adoption of two domestically produced lithography machines.
The release of the MIIT guide has injected a fresh wave of optimism into China’s semiconductor sector.
The guide’s endorsement of two domestic lithography machines—one with a resolution of 65 nanometers—has been interpreted as a significant step toward reducing China’s dependence on international chipmaking technology.
Shenyang Blue Silver Industry Automation Equipment saw a notable 10.7% rise by market close, reflecting investor confidence in the government’s commitment to advancing domestic technology despite ongoing international export restrictions.
Domestic chip technology progress
The MIIT’s promotion of domestic lithography machines represents a significant milestone for China’s chip industry.
While the 65-nanometer machine still lags behind international competitors like Dutch firm ASML, which produces chips with resolutions as small as 8 nanometers, the government’s support for domestic technology marks an important development in China’s semiconductor ambitions.
This move highlights China’s growing focus on self-sufficiency in chipmaking.
China’s semiconductor industry has faced substantial challenges due to US export restrictions, which have hindered access to advanced foreign technology.
These restrictions, aimed at limiting China’s technological advancements, have blocked access to critical equipment from global leaders like ASML.
In response, Chinese companies, including Shanghai Micro Electronics Equipment (SMEE), have intensified efforts to develop domestic lithography machines.
The MIIT guide’s endorsement signals growing momentum in these efforts, boosting investor optimism about China’s potential for achieving self-sufficiency in chip technology.
China’s 65-nanometer lithography machine
The lithography machine featured in the MIIT guide, offering a resolution of 65 nanometers, represents a significant advancement for China’s semiconductor industry.
However, this technology still falls short of the cutting-edge machines produced by ASML, which can achieve resolutions of 8 nanometers or less.
Industry experts, including Leslie Wu, CEO of RHCC, recognize the challenges China faces in closing the gap with global semiconductor leaders.
Nevertheless, the government’s support for domestic equipment is seen as a positive step toward enhancing the country’s chipmaking capabilities.
The MIIT’s guidance has sparked enthusiasm across China’s semiconductor sector, particularly among companies developing advanced lithography machines.
Firms like Shanghai Micro Electronics Equipment (SMEE) are at the forefront of efforts to reduce dependence on foreign technology.
While challenges remain, the recent surge in stock prices reflects growing confidence in the potential for China’s chip industry to become more competitive on the global stage.
As the country continues to invest in domestic technology, the semiconductor sector is poised for further growth and innovation.
The post Chinese semiconductor stocks surge on government endorsement of domestic chip technology appeared first on Invezz
