Great Wall Fund Fund Manager Yang Weiwei: New Opportunities in the Semiconductor Sector Driven by Dual Factors

Since 2026, the semiconductor industry chain has experienced a new wave of price increases, with many companies issuing price hike notices across segments such as storage, CPUs, packaging and testing, and design. The semiconductor sector in the secondary market also shows a full industry chain resonance.

The current chip price increase cycle is driven by an imbalance between supply and demand caused by explosive AI demand. Leading global semiconductor companies are actively increasing capital expenditures, clearly targeting capacity expansion for advanced logic and memory chips, sending a strong signal of sustained demand growth across the entire industry chain.

Against this backdrop, two core factors have fueled the price hike wave in the semiconductor industry chain: First, after a previous cycle adjustment, inventory levels in fields like analog chips have returned to reasonable levels. Meanwhile, the explosive growth in AI computing power demand has caused shortages in storage chips. Coupled with major manufacturers reducing traditional capacity, the supply-demand imbalance has continued to widen; Second, prices of resources such as gold, silver, and copper have risen, increasing chip manufacturing costs. Both wafer foundries and packaging and testing lines are raising prices, forcing companies to pass costs onto customers through price hikes.

The widespread price increases across the semiconductor chain may indicate that the industry cycle is shifting from structural prosperity to a full recovery. In fact, another key narrative for semiconductors is localization. Over the past two years, due to uncertainties in the international supply chain, the domesticization of semiconductor equipment has also been steadily advancing.

From an industry prosperity perspective, the current semiconductor sector shows structural differentiation. The storage segment is already at a high point of prosperity, with sustained growth potentially exceeding expectations; meanwhile, consumer chips such as SOCs and analog chips remain in a low cycle. Notably, the growth logic of the semiconductor industry has moved beyond traditional macro cycles, relying more on the dual benefits of AI technological transformation and domesticization. AI’s support for the domestic semiconductor industry is still in its early stages.

Specifically, three major directions offer promising investment opportunities:

First, domestic computing power. As the core engine of this industry growth cycle, the competitive landscape in this area is still taking shape. Product iterations and breakthroughs with customers by relevant companies will create differentiated investment opportunities. The acceleration of infrastructure construction for computing power is expected to continue increasing the market penetration of domestic chips.

Second, benefits from capacity expansion in wafer fabs. Driven by AI’s demand for advanced processes, shortages in storage chips, and increased foundry demand, semiconductor equipment, materials, and components are likely to see a rise in both volume and price.

Third, military semiconductor sector. On one hand, the military industry is expected to see a recovery in prosperity; on the other hand, new demand from commercial aerospace is expected to play a boosting role.

From a fundamental trend perspective, after continuous gains since September 2024, the valuation of the semiconductor sector is not low overall, but the industry trend remains upward. The main risk currently lies in liquidity. It is recommended to focus on long-term positioning, based on the high certainty, large potential, and long cycle of semiconductor industry growth, to better capture the investment dividends brought by industry transformation.

(Source: Shanghai Securities News)