Key Takeaways
- CLSA reiterates "Outperform" ratings on SMIC and Hua Hong, citing AI chip demand.
- SMIC price target lifted to HKD 93.3, with Hua Hong set at HKD 129.5.
- Report highlights smooth expansion of China's advanced semiconductor capacity.
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CLSA Lifts SMIC Target to HKD 93 on China AI Chip Boom
CLSA reiterated its "Outperform" rating on Semiconductor Manufacturing International Corp. (00981.HK) and Hua Hong Semiconductor (01347.HK), lifting its price target for SMIC to HKD 93.3 amid accelerating AI chipset localization in China.
"The expansion of China’s advanced process capacity is progressing smoothly," a CLSA report said, citing the development of domestic large AI models and a recovery in overall demand for analog chips as key drivers.
The brokerage set a new price target of HKD 129.5 for Hua Hong. The bullish call comes as SMIC’s Hong Kong-listed shares rose 6.8 percent on the news, with short-selling volume accounting for 12 percent of turnover on April 24. Hua Hong shares climbed 4.5 percent.
The positive outlook reflects a broader trend of technology self-sufficiency in China. The report follows the recent release of new AI models from Beijing-based DeepSeek, which are tailored for Huawei-designed chips, and strong quarterly results from US peers Texas Instruments and Intel that suggest a wider industry recovery.
CLSA expects domestic foundries to be the primary beneficiaries of the localization push. This trend is gaining traction in major industries, with automakers like Volkswagen AG recently announcing deep partnerships with Chinese firms such as Horizon Robotics to develop in-car AI and advanced driver-assistance systems for the local market.
The report suggests that if demand remains strong, the recent price hike trend in the sector is expected to continue. The focus on AI chipset localization is seen as a critical factor that will support growth for China's semiconductor leaders.
The reiterated "Outperform" ratings signal that analysts see further upside for the foundries as they capture growing domestic demand. Investors will watch upcoming earnings reports from SMIC and Hua Hong to confirm if the localization trend translates to higher revenue and improved margins.
This article is for informational purposes only and does not constitute investment advice.
[1] Volkswagen unveils China NEV blitz: 20+ models in 2026, AI agents and Level 3...[2] DeepSeek unveils new AI model tailored for Huawei chips as China pushes for tech autonomy[3] Semiconductor Stocks Surge After Intel Results and Upbeat Industry Forecast on April 26, 2026 - News and Statistics - IndexBox[4] CLSA: DeepSeek Model Highlights Smooth Expansion of China's Advanced Process Capacity; Remains Positive on SMIC (00981.HK) and Hua Hong Semiconductor (01347.HK) - AASTOCKS.com
