The semiconductor industry has recently experienced significant fluctuations, capturing the attention of investors and market analysts alike. On the 8th of this month, after a substantial increase the previous day, the sector seemed to trend downward. Yet amidst this general decline, a remarkable outlier emerged: Higon Information. Defying market trends, its stock price climbed, propelling its total market capitalization past that of Semiconductor Manufacturing International Corporation (SMIC) and taking the lead in valuation within the Science and Technology Innovation Board (STAR Market). This swift ascent marked a transition of power in the semiconductor domain, illuminating the immense potential that lies in this burgeoning field.
Adding fuel to the fire, the Consumer Electronics Show (CES) recently commenced, heralding fresh industry developments. Notably, Nvidia unveiled a series of groundbreaking products, including innovative handheld devices, which are poised to invigorate growth sectors within the domestic semiconductor industry. According to SEMI, a semiconductor industry association, the global expenditures on wafer fab equipment are projected to reach a staggering $113 billion in 2024, showcasing a clear upward trajectory in industry recovery. External constraints further amplify the urgency for domestic replacements of semiconductor equipment components, underscoring the importance of fostering a self-reliant semiconductor ecosystem.
In China, policy support continues to flourish. The National Integrated Circuit Industry Investment Fund (commonly referred to as the "Big Fund") is anticipated to prioritize backing for core technologies and critical component sectors, providing robust assurance for industry development. As evidenced by the recent volatility in the semiconductor sector, the Semiconductor Equipment ETF (SH561980) serves as a pertinent case study. On January 7, it surged by 3.4%, only to experience a market correction the following day. This pattern reflects not only the sector's volatility but also its susceptibility to broader market influences.
Although current fluctuations appear daunting, long-term prospects for the semiconductor sector remain promising. Investors should consider the potential for a rebound after the market has stabilized from its adjustments. The ETF capturing the semiconductor equipment sector affords opportunities for discerning investors. It passively tracks the CSI Semiconductor Industry Index, with a near 70% allocation to "semiconductor equipment + semiconductor materials,” thus providing exposure to key industry players like NAURA Technology Group and Northern Huachuang. As the market readjusts, now is an opportune moment to explore investments in this ETF.
For many investors, especially those exploring options beyond direct stock purchases, connecting through associated funds represents a pragmatic approach to entering specific fields. In this particular instance, specific connected funds are available. Class A shares are coded as 020464, while Class C shares are coded 020465. Investors can leverage these connected funds for regular investments or one-time purchases based on their strategic financial management.
Engaging in periodic investments, or systematic investment plans, offers unique advantages. Investors can allocate a fixed amount of funds at predetermined intervals—monthly or quarterly—to acquire shares in these funds. This consistent strategy, akin to a steady stream, allows investors to engage in the market regardless of its current status, buying more shares during downturns when prices are lower, and capitalizing on gains during upswings. By adopting this method, investors can gradually accumulate substantial holdings over time.
Conversely, the flexibility of making purchases according to market conditions enables investors to tactically enter the fray, capitalizing on phase-specific investment opportunities as they arise. Whether opting for systematic investment plans or ad hoc purchases, both methods impart a capacity for investors to skillfully navigate volatile market landscapes while gradually building portfolio strength.
Refocusing specifically on the semiconductor sector, it is essential to acknowledge the various factors influencing its short-term movements. Macro-economic conditions, competitive landscape adjustments, advancements in relevant technologies, and shifts in supply and demand across the supply chain all contribute to the sector's inherent volatility. Consequently, prices can fluctuate significantly over brief intervals.
However, casting a wider net reveals the significant long-term potential embedded within the semiconductor industry. As we traverse an era characterized by rapid technological advancement, the reliance on semiconductors is solidifying. They serve as the backbone for an array of products, from smartphones and computers to automated industrial machinery and advanced AI systems. Moreover, the increasing global focus on semiconductor production and innovation presents strong impetus for sustained growth. Countries across the world are implementing supportive policies aimed at developing domestic semiconductor capabilities, which reflects a united front in fostering industry evolution.
In light of this vast potential landscape, it is certainly worthwhile for investors to delve deeper into the semiconductor sector. Current market fluctuations may present a valuable opportunity to invest in advantageous products. As previously mentioned, the strategic utilization of connected funds through systematic investments or one-off purchases can ensure entry into the market at a relatively low price point. Given the anticipated advancements and opportunities within the semiconductor sector, aligning investments with the industry's expected growth trajectory could yield substantial returns, allowing investors to safeguard and enhance their assets over time.