Chip stocks saw their losses widen during the afternoon trading session. At the time of writing, HUA HONG SEMI (01347) was down 4.89%, trading at HK$116.7; ASMPT (00522) fell 4.84% to HK$104.2; SMIC (00981) declined 3.28% to HK$76.7; and SHANGHAI FUDAN (01385) dropped 0.78% to HK$50.75.

Market sentiment was influenced by the recent visit to China by Jensen Huang, NVIDIA's founder and CEO, alongside market rumors suggesting that the H200 chip has received approval for entry into the Chinese market.

Analysts point out that, in the short term, the arrival of the H200 could address the critical shortage of high-end computing resources within China's AI industry, potentially accelerating the development of large language models and fostering faster iteration of AI applications.

However, from a long-term perspective, the fundamental logic driving the domestic substitution of AI chips remains unchanged.

First Shanghai released a research note stating that the potential easing of H200 restrictions would have a very limited impact on the domestic computing power industry chain. The primary reasons cited include the H200's main application in training scenarios, whereas domestic computing power is predominantly focused on training smaller, vertical models and inference applications, resulting in low overlap in their respective use cases.

Furthermore, the report highlights that domestic computing power is expected to undergo a generational upgrade around 2026, with the new generation of products aiming to match the computing power of the H100. It also notes that the H200 offers less compelling cost-effectiveness for inference scenarios.

Additionally, the trend in domestic computing power is moving towards the development of super-nodes, which is anticipated to further enhance its overall cost-performance ratio.