Chinese Chipmaking Stocks Rise as Government Warns Against Reliance on US Chips
Chinese chipmaking stocks surged on Wednesday after the government warned against relying on US-made chips, encouraging businesses to buy locally following new US export restrictions. The warning came after Washington imposed its third major crackdown in three years on China’s chipmaking industry, cutting off key chipmaking equipment access to several companies.
Semiconductor Manufacturing International Corp, China’s largest chipmaker by volume, rose 2.7% in Hong Kong trade, while peers Hua Hong Semiconductor Ltd and Shanghai Fudan Microelectronics Group Co Ltd added around 1% each. The Chinese government warned that US chips are “no longer safe” and encouraged companies to buy locally, citing the country’s rapidly growing chipmaking industry.
The move was seen as a response to Washington’s efforts to restrict China’s access to the artificial intelligence industry, with the US citing national security concerns. The situation is expected to worsen with the impending presidency of Donald Trump, who has threatened to impose more trade tariffs against Beijing.
The escalating trade tensions have boosted the prospect of increased demand within China for locally made chips, with major companies such as SMIC and Huawei already producing chip offerings that compete with those of US majors like NVIDIA Corporation. The development could lead to a surge in domestic demand for Chinese chipmaking stocks.
