0502 GMT - China's ongoing AI innovation and continued demand for AI chips should bode well for SMIC, China's largest contract chip maker. SMIC shares are up 7.0% in Hong Kong as Nvidia shares pulled back from a record high after announcing a $100 billion investment in OpenAI a day earlier. The two counters' moves tend to be inversely correlated, and Nvidia dropped on concerns over whether its data centers will be able to access enough energy. Beijing's guidance to not use Nvidia's chips will likely benefit the local semiconductor supply chain, from chip designers like Huawei and Cambricon to manufacturers like SMIC. Goldman Sachs is bullish on SMIC, seeing "increasing visibility in the long-term demand growth of AI chips in China, which we believe will benefit leading domestic foundries like SMIC."(sherry.qin@wsj.com)

(END) Dow Jones Newswires

September 24, 2025 01:02 ET (05:02 GMT)

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