Hong Kong-listed semiconductor stocks extended a recent rally, with Montage Technology Inc. jumping 6 percent, as traders piled into companies seen as direct beneficiaries of China’s drive for technological self-sufficiency. The move coincides with a broader surge in Asian chipmakers, with benchmarks in Taiwan and South Korea climbing over 4.5 percent.
"The performance leadership has shifted decisively from mega-cap internet platforms to semiconductors, robotics, and advanced manufacturing," Rebecca Chua, Managing Partner at Premia Partners, said in a recent analysis. "Earnings growth is the number one signal... people would quickly divert their attention to those that can really deliver and monetise."
The gains were concentrated in the hardware sector. Alongside Montage Technology, Solomon Systech (International) Ltd. rose nearly 5 percent and Ingdanic Inc. added almost 4 percent. The rally in these names stands in contrast to the weaker performance of the broader Hang Seng Tech Index, which is dominated by consumer-facing internet companies that are now primarily consumers, rather than beneficiaries, of the AI build-out.
The divergence underscores a fundamental rewiring of China's technology landscape, driven by government policy. Beijing's 15th Five-Year Plan prioritizes "hardcore technology," and procurement mandates are forcing entities from data centers to EV makers to buy locally. This policy is expected to slash the China market share of foreign firms like Nvidia from 54 percent to just 8 percent this year, according to a Bernstein analysis cited by Premia Partners, with domestic players absorbing the difference.
The rally is not just a narrative story; investors are now demanding tangible results. The focus has sharpened on firms that can translate policy support into accelerating profits. For example, onshore-listed Cambricon, a leading Chinese AI chip company, reported its first full year of profit and is expected to have a strongly positive 2026 on the back of major customer wins.
This dynamic has led to a significant performance gap between China's onshore and offshore equity markets. While Hong Kong's Hang Seng Index has been sluggish, the onshore CSI 300 has posted positive returns, and dedicated "hardcore tech" ETFs tracking the Shanghai STAR Market are up double digits year-to-date. The move reflects a rotation of capital to where the new earnings power sits: the hardware layer that forms the chokepoint in the AI supply chain.
This article is for informational purposes only and does not constitute investment advice.
