Shares of Hua Hong Grace (01347) surged more than 5% during the trading session. At the time of writing, the stock is up 3.77%, trading at HK$209.40 with a turnover of HK$2.678 billion.

Hua Hong Grace announced that its previously disclosed plan to issue shares for the acquisition of a 97.4988% stake in Huali Microelectronics and to raise supporting funds has received approval for registration from the China Securities Regulatory Commission on July 8. The supporting fund raising will not exceed 7.556 billion yuan. Upon completion of this transaction, Hua Hong will gain full control of Huali Microelectronics.

Market Analysis and Outlook

Analysis suggests that in 2025, TSMC has officially begun a gradual reduction of its 8-inch wafer production capacity, with the goal of completely halting production in some facilities by 2027. Samsung also initiated reductions in its 8-inch production lines the same year. In 2026, although manufacturers like SMIC and Vanguard plan modest capacity expansions, these increases are not expected to offset the scale of reductions by the two industry giants. Concurrently, the demand for power management and power semiconductors from AI servers has increased significantly, driving the capacity utilization rate for 8-inch wafers among major foundries back up to nearly 90%. This situation has led to expectations of rising prices for mature-process wafer foundry services.