AI frenzy has powered a rally in global semiconductor shares. Investors who overlooked Chinese chip-related stocks due to US export controls may be missing out. There is room for upside here.
US restrictions on chips sold to China have already cut off the country’s access to the most advanced chips. Export curbs on the tools that make the chips, most notably from the Netherlands, go into effect next Friday. It is home to ASML, the only maker of gear that can make the most advanced chips. So it is understandable that Chinese imports of semiconductor equipment have surged to record highs in recent months.
China is running out of options when it comes to buying and making advanced chips. That makes it all the more important for the country to maximise production of the lower-tech chips it is still able to produce. In some cases, a large number of lower-tech chips can get complicated processing jobs done.