Strong Recovery Driven by AI and Memory Chip Boom

As of May 11, 2026, the semiconductor industry is witnessing a strong recovery and a high prosperity cycle, driven by multiple factors including an explosive surge in AI computing power demand, rising memory chip prices, and accelerated domestic substitution of advanced packaging. Below is a summary of key news updates:

I. Market Performance and Index Trends

A-share semiconductor sector rallies across the boardThe STAR Market 50 Index hit a record high, and the Shanghai Composite Index broke above the 4,200-point mark.

Multiple ETFs including Harvest STAR Chip ETF (588200), Guotai Integrated Circuit ETF (159546) and STAR Chip Design ETF (589260) surged by 4% to 6%.

New stock highs concentrated in AI-related tracksLeading enterprises such as Montage Technology, Hygon Information, Biwin Storage, Demingli and Advanced Micro-Fabrication Equipment hit record stock price highs, benefiting from strong demand for AI servers, HBM, GPUs and advanced packaging.

II. Global Market and Sales Data

Global semiconductor sales continue to climbGlobal semiconductor sales reached US$298.5 billion in Q1 2026, up 25% quarter-on-quarter and nearly 80% year-on-year.

Monthly sales stood at US$99.5 billion in March 2026, a sharp year-on-year increase of 79.2%.

Memory chip prices surge sharplyDRAM contract prices for the second quarter are expected to rise 58%~63% quarter-on-quarter, while NAND flash prices will jump 70%~75%, marking the largest increase in 15 years.

Core reason: Production capacity is tilted toward AI-dedicated HBM/DDR5, resulting in tight supply of general-purpose memory chips. The supply-demand gap stands at 4.9% for DRAM and 4.2% for NAND.

III. Technological Breakthroughs and Industrial Progress

Orbital experiment of flexible monocrystalline silicon batteriesThe Tianzhou-10 spacecraft carried China’s self-developed flexibly packaged monocrystalline silicon solar cells for space environment experiments. Featuring ultra-thin lightweight design and low cost (only 1/10 of gallium arsenide batteries), the product boosts the development of space photovoltaic energy.

Accelerated domestic substitution of advanced packagingSoaring demand for packaging and testing has driven robust order inflows for domestic equipment and materials such as dicing machines, die bonders, bonding equipment and photoresists.

The Semiconductor Materials & Equipment Index (931743) skyrocketed 7.85% intraday, with Changchuan Technology and CSSC Special Gas hitting the daily limit up.

IV. Corporate Developments and Investment Opportunities

AI computing power fuels demand for equipment and materialsSTAR Market-listed semiconductor equipment firms including Advanced Micro-Fabrication Equipment, Microguide Nano and Xinqi Microequipment boast strong order books, accelerating capacity expansion and global layout.

Microguide Nano launched its intelligent thin-film deposition factory project in the second half of 2025, planning to add an annual capacity of 50 sets within three years.

Explosive performance growth of memory module manufacturersIn Q1 2026, Biwin Storage, Demingli and Longsys achieved year-on-year net profit growth of 15.6 times, 49.4 times and 26.4 times respectively.

Biwin Storage has signed a US$1.5 billion long-term wafer procurement agreement to lock in production capacity beyond 2027.

V. Risks and Challenges

Widespread cost hikes and profit differentiationPrices have risen generally across upstream materials, wafer foundry and packaging links, with over 80% of listed semiconductor companies reporting higher year-on-year operating costs.

Though power semiconductor enterprises raised product prices, nearly half recorded a decline in Q1 net profit, showing obvious performance divergence.

Structural capacity shortageManufacturers such as TSMC are focusing on advanced process nodes, leading to contraction in mature process capacity and intensifying resource competition between AI and consumer electronics sectors.