HK Stock Market Move | Semiconductor stocks rise; HUA HONG SEMI (01347) once surged over 6%. Institutions are optimistic about the growth potential of AI and localization.

Semiconductor stocks rose in the afternoon, as of the time of writing, HUA HONG SEMI (01347) rose by 5.76% to HK$41.3; Semiconductor Manufacturing International Corporation (00981) rose by 3.38% to HK$51.95; SHANGHAI FUDAN (01385) rose by 3.45% to HK$28.45; SOLOMON SYSTECH (02878) rose by 2.22% to HK$0.46. On the news front, U.S. President Trump announced an artificial intelligence action plan on Wednesday. The plan aims to strengthen the U.S.'s leading position in the field of artificial intelligence to maintain its lead over China. Soochow believes that under the backdrop of continued tightening regulations in the U.S., the trend of self-control is irreversible and unchangeable. In addition, Semiconductor Manufacturing International Corporation and Hua Hong Semiconductor have given lower Q2 performance guidance due to concerns about the decline in government subsidies, however, based on the current downstream economic conditions and the level of operation of the two companies, the bank believes that both companies can beat the guidance for Q2 performance, with marginal economic conditions being maintained. With the release of new government subsidy policies in Q3, it is expected to further boost economic conditions, and the wafer foundry industry is expected to be favorable. Guosen points out that on one hand, TSMC expects strong demand for AI and moderate recovery in non-AI demand, leading to an increase in revenue growth expectations from around 25% to around 30%; on the other hand, recent visits by Huang Renxun to China, Semiconductor Manufacturing International Corporation's performance nearing, and Apple's new product stocking launch, the industry is expected to experience intense catalysis. The bank remains optimistic about the "valuation expansion" market of the electronics sector in the "macro policy cycle, industry inventory cycle, AI innovation cycle" resonance of 25 years. The bank believes that the semiconductor industry is relatively strong, with AI and domestic production opening up growth opportunities in the domestic market.