On June 2, SMIC (00981.HK) rose 3.4% in regular trading, trading at HK$81.15/share with trading volume of HK$1.131 billion. The stock is rebounding after consecutive sharp declines of 8.97% and 5.34% in its A-share listing on May 29 and June 1 respectively.

The rebound comes in the wake of Huawei's landmark announcement of the Tao Law on May 25 at ISCAS 2026, which proposes replacing geometric scaling with time scaling in semiconductor development. The new paradigm validates mature-node foundry capabilities by enabling high-performance chip production without cutting-edge lithography, directly benefiting SMIC's existing 7nm/14nm/28nm process lines. Analysts noted SMIC's competitive position shifts from follower to parallel runner under this framework.

Additionally, south-bound capital has accumulated over 80 million shares in SMIC over the past week, with net inflows exceeding HK$7 billion. Separately, STMicroelectronics announced its second price hike of the year effective June 28, signaling tightening industry supply conditions that support foundry pricing power.

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