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Bloomberg
Chinese chipmakers have surged in the past year, boosted by Beijing’s support for self-sufficiency in semiconductors and as adoption of 5G and artificial intelligence prove resilient amid the pandemic. There’s no sign that rally is about to slow even as their stocks looks increasingly expensive.
Cambricon Technologies, a developer of AI chips, rose 34%, extending its first-day surge of 230% on the Shanghai Stock Exchange’s STAR board.
It follows top chipmaker Semiconductor Manufacturing International, which jumped 202% on its Shanghai debut last Thursday. Other chip stocks that have also rallied include Advanced Micro-Fabrication Equipment Inc, which has posted gains of about 139% since the start of this year, while Will Semiconductor and Gigadevice Semiconductor (Beijing) are the fifth- and seventh-best performers on the CSI 300 Index in the past twelve months.
That’s left chipmakers trading at lofty valuations. SMIC’s first-day surge meant its Shanghai stock has a price-to-earnings multiple of 278 times, more than three times that of its Hong Kong-traded securities.