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Hang Seng Index rises, semiconductor sector leads gains

Read original on 36氪
#semiconductor#market-analysis#chip-manufacturing

Semiconductor sector gains in Hong Kong highlight regional chip manufacturing momentum.

30-Second TL;DR

What Changed

Hang Seng Tech Index rose by 1.04% at opening

Why It Matters

The rise in semiconductor stocks indicates continued investor interest in the regional chip manufacturing ecosystem.

What To Do Next

Track SMIC's quarterly performance to understand the regional semiconductor manufacturing capacity for AI chips.

Who should care:Founders & Product Leaders

Key Points

  • •Hang Seng Tech Index rose by 1.04% at opening
  • •Semiconductor sector led market gains with SMIC rising over 3%
  • •Petrochemical and coal sectors faced downward pressure
Key numbers8%16%24%10%

Deep Insight

Background and context from public sources — not the original article. 12 sources cited.

Enhanced Key Takeaways

  • •The Hang Seng Tech Index, launched in July 2020, tracks the 30 largest technology companies listed in Hong Kong, with an 8% maximum weighting per constituent, focusing on themes such as cloud, digital, e-commerce, fintech, and internet.
  • •China's semiconductor industry is experiencing rapid acceleration, with its share of global manufacturing capacity increasing from 16% in 2019 to 24% in 2023, and a projected 12-inch wafer fabrication capacity of 9 million wafers per month by the end of 2024.
  • •SMIC, mainland China's largest contract chip maker, achieved volume production of its 5nm-class N+3 process node in December 2025, notably accomplishing this using deep ultraviolet (DUV) lithography without the need for extreme ultraviolet (EUV) tools.
  • •Analysts predict that the Hang Seng Index's performance in 2026 will primarily be driven by corporate earnings growth, with particular strength expected in the consumer discretionary, materials, and information technology sectors, and some forecasts suggesting an 8-10% return.
  • •China has set an ambitious target to achieve 80% chip self-sufficiency by 2030, as outlined in its 15th Five-Year Plan (2026-2030), which prioritizes advanced logic process nodes (7nm/5nm), memory industry expansion, lithography breakthroughs, and the localization of core equipment and materials.

Technical Deep Dive

  • SMIC offers integrated circuit (IC) manufacturing services across process technologies ranging from 350 nm down to 7 nm.
  • In December 2025, SMIC officially achieved volume production of its 5 nm-class N+3 node, which represents China's most advanced semiconductor node produced without extreme ultraviolet (EUV) lithography tools.
  • The N+3 node is considered a scaled evolution of SMIC's 7nm-class process, indicating progress towards a "true 5nm-equivalent node" using deep ultraviolet (DUV) lithography.
  • Manufacturing 5nm-class chips with DUV, as SMIC does, presents significant challenges and is associated with notable yield issues, particularly due to aggressively scaled metal pitch, which can lead to operating losses for certain products like the Huawei Kirin 9030 SoC.
  • SMIC's 7nm FinFET technology is currently utilized for manufacturing Huawei's smartphones and AI accelerator chips.
  • The company's 5nm process technology is presently in the research and development (R&D) phase.

Future ImplicationsAI analysis grounded in cited sources

China's domestic semiconductor industry will continue to reduce its reliance on foreign technology.
Strategic investments and government initiatives, such as the 15th Five-Year Plan (2026-2030) targeting 80% self-sufficiency by 2030, are actively driving localization efforts and the development of advanced process nodes within China.
The Hang Seng Index and Hang Seng Tech Index are likely to receive sustained support from the technology sector.
Analysts forecast continued technology earnings growth and AI-driven development as crucial factors bolstering Hong Kong's equity market performance throughout 2026.
SMIC's production of advanced nodes without EUV lithography will continue to face challenges related to yield and profitability.
While SMIC has achieved 5nm-class production using DUV, this method is known to encounter significant yield issues due to aggressively scaled metal pitch, which could result in operational losses for some manufactured products.

Timeline

2000-04
Semiconductor Manufacturing International Corporation (SMIC) founded.
2019-12
SMIC began recognizing 14nm revenue from volume production.
2020-07
Hang Seng Tech Index launched.
2023-09
Huawei launched Mate 60 smartphone with Kirin 9000s chip, manufactured by SMIC using 7nm technology.
2025-12
SMIC achieved volume production of its 5nm-class N+3 node, confirmed by TechInsights analysis of Huawei's Kirin 9030 processor.
2026-05
SMIC reported Q1 2026 sales of $2.505 billion, an 11.5% increase year-over-year.
Read original article on 36氪

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