Where to begin

The A-share market consolidated today (August 11), with more stocks falling than rising across the market. Over 6.5 billion yuan of main capital flowed into the electronics sector against the trend, placing it second in sector absorption among the 31 Shenwan primary industries. The Huabao Electronics ETF (515260), which gathers core leaders of the electronics sector, fluctuated with the market. Its intraday price initially rose by up to 1.13% in the morning, then retreated with the market, eventually closing down 1.36%. Notably, yesterday marked the first pullback after four consecutive daily gains for the Huabao Electronics ETF (515260), and capital seized the dip to position itself. Data shows the ETF attracted 29.88 million yuan in a single day yesterday, reflecting investor confidence in the electronics sector's future performance and active positioning ahead of the curve.

Among component stocks, EDA concept stock Empyrean Technology led gains with a rise of over 5%, PCB leader Dongshan Precision Manufacturing climbed more than 4%, MLCC concept stock Chaozhou Three-Circle (Group) rose over 2%, and memory chip leader Longsys Electronics gained more than 1%, leading the rally. On the downside, semiconductor equipment leader Advanced Micro-Fabrication Equipment Inc. (AMEC) fell over 6%, Piotech and ACM Research (Shanghai) dropped more than 3%, and AI server leader Foxconn Industrial Internet declined over 4%, weighing on the index.

Why MLCC, memory chips, and PCB are rising

On the news front, the electronics sector's sub-segments are experiencing a "price surge wave." For MLCCs, strong AI demand is boosting the passive component market, triggering a rush to buy and secure supply. Industry sources report that some customers, seeking to secure sufficient materials, are willing to pay two to three times the price to major passive component manufacturers like Yageo and Murata Manufacturing, creating a bidding war that highlights the increasingly tight supply-demand balance for MLCCs. Yageo acknowledged that MLCC demand is indeed very strong, with market heat continuing to rise across capacity utilization, new customer projects, and long-term contracts.

For memory chips, Longsys Electronics released its 2026 semi-annual report, showing a net profit attributable to the parent company of 10.577 billion yuan in the first half, a surge of 71,528.66% year-on-year. In just six months, Longsys's net profit has already reached nearly eight times its full-year 2025 figure. Sinolink Securities predicts that the memory upcycle could extend into 2027, driven by persistent supply constraints. Massive storage demand from large model training and inference, coupled with the two-year cycle for new capacity release from wafer fabs due to construction and equipment procurement constraints, means original equipment manufacturer (OEM) expansion cannot keep pace with demand. This supply-demand gap will support memory prices and scale reaching new heights.

For PCBs, the printed circuit board industry is seeing an "order explosion," with high-end products in short supply and orders for some leading manufacturers already booked into 2027. Upstream suppliers have issued PCB price hike notices, with high-speed PCB price increases exceeding four times. CITIC Securities points out that driven by AI, the global PCB industry is entering a new upcycle. With increasing demand for orthogonal backplanes and upgrades to CoWoS packaging processes, PCBs are becoming more akin to semiconductors, with steadily increasing value. Cloud giants like Amazon, Meta, and Google, whose in-house chip design capabilities are weaker than Nvidia's, have higher requirements for materials like PCBs, making their value more elastic.

Institutional outlook: A new cycle is forming

CICC notes that demand for AI hardware remains robust. On the hardware cost side, despite memory inflation, GPU technological iteration efficiency gains continue to drive down the cost per token. From the model perspective, closed-source models rely on premiums, while open-source models reduce costs, ensuring a solid profit base for various manufacturers. Upstream computing hardware demand continues to be driven. As inference applications shift from traditional Chat-only models to Agent-based scenarios, AI hardware may accelerate per-token cost reduction through customized architectures and system interconnect optimization, or overcome latency and throughput bottlenecks, providing performance premiums for real-time interaction and Agent scenarios. The diversification of hardware cost reduction is expected to stimulate further demand.

Looking ahead, Huatai Securities believes that as demand continues to be released, the core driver of the AI hardware supply chain will shift from a "price surge cycle" to a "capacity expansion cycle." The future competitive focus will move from "who owns the resources" to "who has higher efficiency, more advanced processes, and stronger supply chain capabilities." From memory and PCBs to upstream materials and equipment, the industry chain's value is being redistributed, with high-end specialization and capacity expansion becoming the core directions for the next phase.

The Huabao Electronics ETF (515260) and its linked funds (Class A: 012550, Class C: 012551) passively track the CSI Electronics 50 Index, focusing on the semiconductor, component, and consumer electronics industries. They cover popular concepts like PCBs (e.g., Dongshan Precision Manufacturing), memory chips (e.g., Longsys Electronics), semiconductor equipment (e.g., ACM Research (Shanghai)), advanced packaging (e.g., JCET Group), glass substrates (e.g., BOE Technology Group), semiconductor silicon wafers (e.g., NSIG), and MLCCs (e.g., Chaozhou Three-Circle (Group)). It is deeply tied to global tech leaders, with component stocks integrated into the supply chains of Apple, Nvidia, and Google.

Source: Shanghai and Shenzhen stock exchanges, etc., as of August 11, 2026. Institutional viewpoints reference: Sinolink Securities report from June 14, "Electronics Industry Research: Strong AI Demand, Memory Price Upward Trend Likely to Continue"; CITIC Securities report from July 7, "PCB Industry: AI PCB Demand Ramping Up, High-End Upgrade Trend Clear, Opening New Space for Equipment and Consumables"; CICC report from August 11, "Unafraid of Storage Inflation, Downstream Profits Healthy, Diversified Cost Reduction Reshapes AI Hardware Investment Narrative"; Huatai Securities report from July 22, "AI Hardware: From Price Hikes to Capacity Expansion, A Cyclical Turning Point." ETF fee notes: ETFs do not charge sales service fees. Subscription and redemption agents may charge commissions up to 0.5%, including fees charged by stock exchanges and registration institutions. On-exchange trading fees are subject to the actual charges of securities firms. Risk disclaimer: The Huabao Electronics ETF (515260) passively tracks the CSI Electronics 50 Index, which was based on December 31, 2008, and launched on July 22, 2009. Index constituent stocks are adjusted according to the index compilation rules. Historical backtest performance does not indicate future index performance. Stocks and index constituents mentioned in this article are for display purposes only and do not constitute investment advice or represent the holdings or trading intentions of any fund managed by the fund manager. The fund manager rates the Huabao Electronics ETF (515260) as risk level R3-moderate risk, suitable for balanced (C3) and above investors. Suitability matching opinions should be based on the sales institution. Any information in this article (including but not limited to stocks, comments, forecasts, charts, indicators, theories, and any form of expression) is for reference only. Investors must take full responsibility for their own investment decisions. This article's views, analyses, and forecasts do not constitute investment advice of any form and are not responsible for any direct or indirect losses arising from the use of this content. Fund investment carries risks. Past performance does not guarantee future results. The performance of other funds managed by the fund manager does not constitute a guarantee for the fund's performance. Invest in funds with caution.