Shares of Hua Hong Grace (ASX: 01347) surged more than 8% in morning trading. At the time of writing, the stock was up 8.61% to HK$195.5, with a turnover of HK$5.846 billion.

The catalyst for the move stems from positive developments across the global semiconductor foundry sector. Taiwan Semiconductor Manufacturing Company (TSMC) is scheduled to announce its second-quarter results in mid-July. A report from Citi noted that TSMC may further raise its 2026 revenue growth forecast during the upcoming earnings call, driven by sustained demand for cutting-edge chips and improved long-term visibility.

In related news, there are indications that Samsung's foundry business could achieve its first monthly profit in three years as early as June.

Adding to the positive sentiment, Goldman Sachs issued a research report significantly raising its price target for Hua Hong Grace from HK$174 to HK$333, while maintaining a "Buy" rating. The report highlighted that advancements in major AI models, including the recent release of Meituan's LongCat2.0, will drive demand for AI chips and data center power management chips. The widespread adoption of generative AI is expected to continuously fuel this demand, a trend from which Hua Hong is positioned to benefit.