Chip stocks experienced broad declines during the morning trading session. At the time of writing, SHANGHAI FUDAN (01385) fell 7.71% to HK$44.28, while HUA HONG SEMI (01347) dropped 4.59% to HK$90.5. SMIC (00981) decreased by 2.59% to HK$60.1, and ASMPT (00522) was down 1.65% to HK$107.2.

Recent reports indicate that the Huahong Group has successfully developed 7nm manufacturing technology. Huahong's subsidiary, Huali Microelectronics, could potentially become the second domestic semiconductor manufacturer, after SMIC, to possess 7nm production capability. Morningstar released a research note stating that if confirmed, this development would fundamentally alter the company's business model. The report suggested that HUA HONG SEMI lacks the incentive to pursue 7nm chip manufacturing and will instead focus on specialized technologies for the Huahong Group, avoiding the development of cutting-edge products.

It is noteworthy that TSMC, SMIC, and HUA HONG SEMI have previously announced price increases for some of their services, with prices for certain process nodes rising by 10% to 20%. The latest information shows that other foundries, including UMC, Vanguard International Semiconductor, Powerchip Semiconductor Manufacturing Corp., and Nexchip Semiconductor Corporation, have also successively reported plans to raise prices. These price adjustments are primarily attributed to geopolitical instability, supply chain fluctuations, and increasing raw material costs.