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The Philadelphia Semiconductor Index (SOX) has entered a technical bear market, falling 20.2% from its June 22 peak. However, the memory segment staged a rally after opening lower for two straight days, with SK Hynix surging more than 8% against the market trend, pointing to widening internal divergence.
Choi Tae-won, Chairman of SK Group, warned that global semiconductor demand will rise by at least 50%–60% next year, with AI-related demand jumping 60%–100%, while incremental supply will be nearly non-existent. Materials and infrastructure may emerge as the next bottlenecks.
Intensive interim report releases are underway across the A-share semiconductor industrial chain: Fuchuang Precision projected an 877%–1122% year-on-year profit increase for H1; Liyuan Information expects a 207%–217% earnings surge fueled by several-fold growth in SiC business; Yangjie Technology forecast a 20%–40% profit growth driven by rapid SiC expansion. The overall prosperity of the industrial chain is translating into tangible earnings.
Amid yen depreciation and skyrocketing semiconductor prices, Apple raised iPhone prices in Japan by up to 10.3%, reflecting persistent pressure of chip cost pass-through to end consumers.
Panya Microfiltration plans to acquire a 54.89% equity stake in Tianyuan Electrical, a PI film manufacturer, to enter the advanced packaging materials track. Guokewei intends to raise RMB 5.061 billion via private placement for R&D of edge AI chips.
In-depth Analysis
Optical Communication & Optical Chips：No major updates today. On July 17, the A-share optical communication sector tumbled sharply alongside the broader market, with Innolight down 12% and trading volume hitting RMB 56 billion. Nevertheless, Decolite’s H1 profit forecast of 217%–277% year-on-year growth validates robust prosperity in data center optical communications. Innolight responded that demand for 1.6T products remains strong and rumors of price cuts are overstated. The market is still digesting SemiAnalysis’s view that large-scale commercialization of CPO will be delayed to 2028–2029.
Advanced Packaging：Panya Microfiltration (688386) announced plans to acquire a 54.089% controlling stake in Tianyuan Electrical with cash. The target specializes in polyimide (PI) films applicable to semiconductor advanced packaging, aerospace and other fields. The acquisition will fill the company’s gaps in upstream PI film capacity and technology, forming a full industrial chain covering PI substrates, FCCL and aerospace-grade composite films.
Earlier on July 17, HKC unveiled a RMB 4 billion investment in an advanced packaging and testing project, with Phase One delivering a monthly capacity of 20 million 12-inch chips, marking a panel manufacturer’s cross-border entry into packaging and testing. The impacts of ASE Group’s price hikes of up to over 20% for CoWoS and FoCoS launched on July 1 are still rippling through the industrial chain.
SiC & Third-Generation Semiconductors：Liyuan Information released its H1 earnings forecast, revealing that sales of ON Semiconductor’s SiC products distributed by the firm multiplied in the first half, with accelerated penetration among top automotive clients. Yangjie Technology projected a 20%–40% year-on-year net profit rise for H1, driven largely by fast-growing automotive electronics and SiC revenue. Penetration of automotive-grade SiC keeps accelerating, benefiting domestic distributors and component manufacturers alike.
Memory & Computing Chips：Choi Tae-won, Chairman of SK Group, stated at the Jeju Forum that global semiconductor demand will surge markedly next year. AI-related demand is expected to jump 60%–100% year-on-year, and overall semiconductor demand will rise by at least 50%–60%, while incremental supply will be nearly zero, likely widening the supply-demand gap further.
The Philadelphia Semiconductor Index tumbled for two straight days from July 17 to 18, confirming a technical bear market. In contrast, memory stocks rebounded after opening lower for two consecutive sessions: SK Hynix rose over 8%, SanDisk over 4% and Micron over 3%. The stark divergence between memory and GPU/equipment sectors reflects stronger market consensus on the resilience of memory supply-demand fundamentals.
The Philadelphia Semiconductor Index tumbled for two straight days from July 17 to 18, confirming a technical bear market. In contrast, memory stocks rebounded after opening lower for two consecutive sessions: SK Hynix rose over 8%, SanDisk over 4% and Micron over 3%. The stark divergence between memory and GPU/equipment sectors reflects stronger market consensus on the resilience of memory supply-demand fundamentals. Guokewei plans to raise no more than RMB 5.061 billion via private placement for the R&D and industrialization of edge AI chips.
Semiconductor Equipment & Materials：Fuchuang Precision expects H1 revenue of RMB 2.1–2.5 billion, up 21.83%–45.03% year-on-year, and net profit of RMB 120–150 million, surging 877%–1122% year-on-year. Sustained capacity expansion by domestic and overseas wafer foundries has boosted demand for core semiconductor equipment components. Feilihua projected H1 net profit growth of 22%–40%, with steady revenue expansion in its semiconductor segment and projected sales of RMB 150 million for electronic quartz fabrics. A subsidiary of TCL Zhonghuan plans to invest RMB 119.6 billion in a large silicon wafer project for integrated circuits in Shenzhen. ASML intends to issue a one-time EUR 20,000 AI boom bonus to all employees.
Policy & Macro Environment：U.S. military airstrikes on Iran entered their ninth consecutive night, with mounting geopolitical tensions in the Middle East suppressing global risk appetite. Hit by yen depreciation and skyrocketing semiconductor prices, Apple raised iPhone prices in Japan by roughly 10.3%. Pressure from chip cost pass-through to end consumers has spread across multiple global markets (the firm previously lifted Mac and iPad prices by 20%). Jiuzhou Yigui announced plans to take a 6.47% equity stake in General Semiconductor, demonstrating continuous cross-industry capital inflows into the semiconductor sector.
Daily Investment Tips
1. The decoupling signal between memory stocks and the SOX Index merits close attention: the SOX has confirmed a technical bear market, yet memory names rallied after opening lower for two consecutive days, with SK Hynix climbing over 8% against the trend. The market has begun pricing two narratives separately: peaking short-term demand for GPUs and AI chips versus a structural memory shortage set to last until 2028. If this divergence persists, memory stocks (especially HBM-related players) may show greater resilience. Still, investors should watch out that memory will hardly stay insulated if broader market sentiment deteriorates further.
2. Choi Tae-won’s warning of a supply-demand gap paired with infrastructure bottleneck risks: Even excluding geopolitical disruptions, material supply and facility construction have emerged as new constraints on industrial growth. Shortages in undersea cables, power equipment and other segments risk slowing the rollout of AI data centers, which in turn creates a last-mile drag on the realization of chip demand.
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