China’s semiconductor stocks could continue rising as investors bet on local chipmaker IPOs and Huawei’s new chip design strategy.

However, record trading turnover and triple-digit earnings multiples have also raised concerns that the sector may be overheating.

Huawei, the Shenzhen-based tech company, appears to be pursuing an architectural workaround rather than a manufacturing-node breakthrough.

Its latest method aims to improve performance by shortening the distance data travels inside processors and stacking computing blocks.

Huawei plans to introduce the first such chips in smartphones later this year.

The IPO pipeline is also helping sentiment. Yangtze Memory, a Wuhan-based flash memory chipmaker, has begun tutoring for a domestic IPO.

ChangXin Memory, a Hefei-based memory chipmaker, filed for a roughly US$4 billion Shanghai listing, highlighting Beijing’s push for chip self-reliance.

That backdrop has strengthened under tighter US export controls, prompting what one analysis described as a whole-of-nation effort to build China’s domestic semiconductor industry.

🔗 Source: Bloomberg

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