Hong Kong chip shares rise despite market dip

Hong Kong chip stocks rose on May 11 as broader indexes fell after the Philadelphia Semiconductor Index climbed more than 11% last week.

Investors bet Beijing would keep backing domestic chip development.

Chinese chip companies Montage Technology and Nasino rose 15.81% to HK$435 (US$55) and 14.29% to HK$194.3 (US$25).

GigaDevice added 9.59% to HK$537 (US$68) and SMIC and Hua Hong Semiconductor rose 4.09% and 5.2%.

The Hang Seng Index fell 0.55% to 26,246.84 and the Hang Seng Tech Index lost 0.74% to 5,064.88 after state TV showed Vice-Premier Ding Xuexiang visiting Huawei’s chip research center in Shanghai on May 8 and calling for basic technology breakthroughs.

🔗 Source: South China Morning Post

🧠 Food for thought

Implications, context, and why it matters.

Huawei’s US$12 billion AI chip revenue projection tracks strong domestic demand, though it does not prove a captive market

Huawei expects AI chip revenue of about US$12 billion in 2026, up from US$7.5 billion in 2025, based on orders already received from Chinese companies 1.
Demand is also coming from advanced domestic AI models. DeepSeek, a Chinese AI startup, has worked with Huawei’s Ascend 950PR AI chip for its V4 model, though most V4 training still ran on Nvidia chips 2.
This momentum is building under US export controls and local policy pressure. Nvidia’s share of China’s AI accelerator market, chips used to speed up AI workloads, has fallen to “zero percent,” said Jensen Huang, CEO of Nvidia 3.

China’s self-reliance push spans the tech stack, though constraints remain

Government support is backing an alternative technology stack, the mix of chips, software, and tools used to build and run AI systems. More than 2,000 Chinese companies are working toward over 70% self-sufficiency across the semiconductor value chain by 2028, said Ren Zhengfei, founder of Huawei, to Xi Jinping 4.
Manufacturing remains a hurdle. CSIS says estimates for SMIC’s yield, the share of usable chips from a production run, on Ascend 910B dies sit around 20% and disputes a claim that it has reached about 40%. CSIS also puts TSMC’s defect-free yield for Nvidia’s 7-nanometer-era graphics processing unit (GPU) production at roughly 41.5% 4.
A long-term split could emerge between a US-led ecosystem built on Nvidia’s CUDA, its software platform for AI development, and a Chinese one centered on Huawei’s CANN software. The provided source material does not support the claim that CANN has over 4 million developers 3.