500th Indigenous Photolithography Machine Delivered, SEMI Capacity to Reach 1/3 of Global Total!

August 8, 2025, as the market closed, the Shanghai Composite Index fell by 0.12%, closing at 3635.13 points; the Shenzhen Component Index fell by 0.26%, closing at 11128.67 points; and the ChiNext Index fell by 0.38%, closing at 2333.96 points. The semiconductor ETF (588170) dropped by 1.31%, and the semiconductor material ETF (562590) fell by 1.22%.

Overnight, foreign markets saw the Dow Jones Industrial Average rise by 0.47%; the Standard & Poor's 500 Index rose by 0.78%; and the Nasdaq Composite Index rose by 0.98%. The Philadelphia Semiconductor Index rose by 0.79%, with Micron Technology rising by 6.28%, ARM Holdings rising by 2.16%, and Envision Semiconductors rising by 0.61%, while Micron Technology fell by 6.57% and Applied Materials rose by 0.94%

Industry News:

1. Huawei will release breakthrough technologies in AI reasoning at the 2025 Financial AI Reasoning Application Launch Conference on August 12, which may reduce China's dependence on HBM technology for AI reasoning and improve domestic AI model inference performance.

2. Xi'an Yide Materials announced that its IPO will be reviewed by the Shanghai Stock Exchange's listing committee on August 14. The company specializes in the development, production, and sales of 12-inch silicon wafers. As of now, it has achieved a majority of its main products' production processes, making it one of the largest suppliers of 12-inch silicon wafers in China.

According to SEMI statistics, as of December 2024, there were 62 12-inch wafer fabrication plants in mainland China (including Xi'an Star, Wuhan SK Hynix, and Nanjing TSMC). It is estimated that by 2026, the number will exceed 70, with an annual output of approximately 321 million units, accounting for one-third of global production. Meanwhile, domestically owned 12-inch wafer fabrication plants will see their capacity increase to around 250 million units per month.

3. According to Shanghai Semiconductor Devices Co.'s official WeChat account, on August 8, 2025, the company held a ceremony marking the delivery of its 500th step-and-repeat photolithography machine, showcasing its leadership in domestic innovation and marking a new milestone for China's high-end semiconductor equipment industry.

4. SMIC recently held its second-quarter earnings conference call. CEO Zhao Haijun stated that the company's sales revenue reached $22.09 billion in the second quarter, down 1.7% year-on-year, with a gross margin of 20.4%, down 2.1 percentage points from the previous quarter. He expects SMIC's production capacity to remain tight until at least October.

Citigroup believes that the global trend towards chip customization is evident, and ASICs will have opportunities for development. Global tech giants are accelerating their layouts in the ASIC market, vying for AI computing capabilities: Google TPU continues to iterate and optimize large model inference performance; Amazon Trainium focuses on improving training efficiency; Meta and Microsoft are actively building their own AI chip systems. The industry chain is developing in a coordinated manner, with Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC) and Samsung Electronics Co., Ltd. deeply participating in ASIC customization projects.

Relevant ETFs: According to publicly available information, the Science and Technology Innovation Board Semiconductor Materials ETF (588170) tracks the Science and Technology Innovation Board Semiconductor Materials Equipment Index, covering hard technology companies in the semiconductor equipment and materials industries. The semiconductor equipment and materials industry is an important sector for indigenous replacement, with a low domestic substitution rate and high potential for replacement.

The Semiconductor Materials ETF (562590) and its linked fund (A-share 020356, C-share 020357) focus on the upstream semiconductor sector, covering semiconductor equipment and materials.