Hong Kong Semi Stocks Surge on Huawei's New Chip Design

Hong Kong Semiconductor Stocks Surge After Huawei's Announcement

Hong Kong semiconductor stocks surged after Huawei's new design approach raised hopes that Chinese chipmakers can close the gap with foreign counterparts despite U.S. export restrictions.

SMIC and Hua Hong Shares Jump

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%.

Huawei's New Approach

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. Bernstein analysts called the advancement 'another DeepSeek moment.'

Confidence in Local Ecosystem

Huawei's approach offers an alternative roadmap for local chip companies to keep progressing despite U.S. trade curbs that have restricted China's access to advanced semiconductor technologies since 2022. Bernstein said if executed successfully, the leap forward will generate massive upside for China's semiconductor sector and inspire confidence in investing in building a local ecosystem.

Future Targets

By 2031, Huawei expects to design high-end chips that match the transistor density of those manufactured with a 1.4-nanometer process. Intel, TSMC, and Samsung Electronics are all aiming to mass-produce 1.4-nanometer semiconductors within the next few years.