Chinese stocks lead global markets as chip shares skyrocket

[SHANGHAI] Chinese stocks were a standout performer in global markets on Friday (Aug 22), with a benchmark of onshore equities capping its best week since early November amid a rally in semiconductor shares.

A gauge of technology shares in mainland China jumped more than 8 per cent, propelled by gains in chipmakers Cambricon Technologies and Hygon Information Technology. The benchmark CSI 300 Index rallied 2.1 per cent, taking its weekly advance to over 4 per cent.

The surge in semiconductor stocks came after a report that Nvidia had asked suppliers such as South Korea’s Samsung Electronics to halt production related to its H20 artificial intelligence chips. The report fuelled investor bets that Chinese players would be expected to serve as alternative suppliers. Shares of Cambricon as well as Hygon finished the session up 20 per cent.

“If H20 production is halted, it means China’s chip demand will still have to rely on homemade semiconductors for now,” said Bloomberg Intelligence strategist Marvin Chen. “Despite relaxation of US chip controls, security concerns may still push China to accelerate self-sufficiency in highly sensitive sectors such as tech.”

Chinese stocks have been gaining momentum in recent weeks as cash-rich local investors rotate out of bonds into stocks amid a low-yield environment onshore. An index of Shanghai-listed stocks has hit the highest level in a decade. The rally has been accompanied by high turnover and widening breadth, with nearly 90 per cent of stocks trading above their 50-day moving averages.

Recent reports that Chinese authorities advised local firms to avoid Nvidia’s H20 chips have lifted sentiment towards chipmakers amid rising geopolitical uncertainty and supply-chain re-shuffling. Meanwhile, the rise of homegrown AI models like DeepSeek has further fuelled demand for local semiconductor solutions. Cambricon announced a 4 billion yuan (S$718 million) private placement in July to fund its large-model chip platform.

Chinese chip stocks listed in Hong Kong also jumped on Friday, with Hua Hong Semiconductor rising almost 18 per cent and Shanghai Fudan Microelectronics Group gaining more than 6 per cent.

“China tech could continue to attract flows if policy and geopolitical risks remain contained,” said Charu Chanana, chief investment strategist at Saxo Markets. “The question for investors is whether policy support and liquidity can keep offsetting the drag from a sluggish macro environment.” BLOOMBERG