On the morning of November 17, Hong Kong-listed chip stocks saw a notable rally, with the first-ever Hong Kong Information Technology ETF (159131) targeting the "Hong Kong chip"产业链 rising 0.62% in intraday trading. Among its constituents, Hua Hong Semiconductor surged over 7%, leading the gains, followed by Kingsoft Cloud's nearly 5% increase, while SMIC and China Software International both climbed more than 3%.
Recent disclosures from SMIC's investor relations activities revealed that the company's production lines are operating at near-full capacity, with Q3 capacity utilization reaching 95.8%, indicating strong demand and supply constraints. One reason for the muted Q4 guidance is the acute shortage of memory chips in the smartphone market, where prices have skyrocketed. To prioritize urgent orders—including analog, memory (NOR/NAND Flash), and MCUs—SMIC has delayed some non-critical smartphone orders, temporarily reducing its smartphone business share.
SMIC noted that the memory market presents a dual impact: boosting current orders while creating uncertainty for next year. A mere 5% supply shortage or surplus could exponentially affect prices. With the current industry supply gap, elevated prices are expected to persist. Additionally, products like NOR Flash, NAND Flash, and MCUs face lengthy validation cycles and high entry barriers, requiring at least 16 months from tape-out to mass production. This ensures incumbent suppliers' stability in the near term.
CITIC Securities highlighted in its 2026 AI investment outlook that domestic AI chips are entering a high-growth phase, with commercialization accelerating. Mid-term, a shift toward domestic chip orders is inevitable.
The Hong Kong Information Technology ETF (159131), the first to focus on the "Hong Kong chip"产业链, offers T+0 trading and tracks an index comprising 70% hardware and 30% software. It heavily invests in Hong Kong-listed semiconductor, electronics, and computer software firms, covering 42 hard-tech companies. SMIC holds the largest weight at 20.27%, followed by Xiaomi Group-W (9.11%) and Hua Hong Semiconductor (5.64%). Notably, it excludes large-cap internet giants like Alibaba, Tencent, and Meituan, offering sharper exposure to Hong Kong's AI hardware sector (data as of October 31, 2025).
Source: CSI Index Company, SSE, and SZSE. Note: The ETF is the first to track the CSI Hong Kong Connect Information Technology Index, which caps single-stock weights at 15%, subject to periodic rebalancing. Recent market volatility may lead to short-term fluctuations that do not predict future performance. Investors should assess risks based on personal circumstances.
Risk Disclosure: The ETF passively tracks the CSI Hong Kong Connect Information Technology Index (base date: November 14, 2014; launched June 23, 2017). Constituent data is for reference only and does not constitute investment advice or reflect fund holdings. The product is managed by Huabao Fund, with distributors bearing no investment or risk management liability. Investors must review fund documents to understand risks and align investments with their risk tolerance. Past performance is not indicative of future results. The fund is rated R4 (medium-high risk), suitable for aggressive (C4) investors. Sales agencies' risk assessments may vary, but cannot undercut the manager's rating. Regulatory approval does not guarantee returns. Invest with caution.