Key Takeaways
Shares of HUA HONG SEMI (01347.HK) jumped more than 6 percent after brokerage firm CLSA said the listed company is unlikely to be affected by new US export restrictions targeting its parent, Hua Hong Group.
"The company mainly produces mature-node semiconductors at 55-nanometer and above, and is therefore unlikely to be affected by the potential restrictions," a CLSA research report said. The note clarified that even if the entire parent group were placed on a restriction list, the measures would primarily target advanced-node equipment.
The US Commerce Department is reportedly restricting chip equipment companies from supplying two specific facilities under the broader Hua Hong Group. These include Fab 6, which uses 28/22-nanometer process technology, and a facility under construction known as "8A." HUA HONG SEMI, the publicly-traded entity, operates different fabs, including 1, 2, 3, 7, and 9, which focus on less advanced, mature-node production.
This distinction is critical as Washington tightens its controls on China's access to high-end chip technology. The US is using "is-informed" letters to quietly order toolmakers like Lam Research and Applied Materials to halt shipments to specific Hua Hong facilities capable of producing more advanced semiconductors for AI applications. The CLSA report removes significant investor uncertainty for the listed company, positioning it as a potentially safer investment compared to Chinese peers with more direct exposure to advanced-node sanctions.
The clarification shields HUA HONG SEMI from the direct impact of sanctions aimed at curbing China's AI ambitions. Investors will now watch to see if the US broadens its restrictions beyond the specific advanced-node fabs operated by the parent company.
This article is for informational purposes only and does not constitute investment advice.
