New information from China Semiconductor Industry

I. SMIC’s RMB 40.6 Billion Merger & Acquisition Approved by CSRC

Event: A major merger and acquisition deal worth RMB 40.6 billion of Semiconductor Manufacturing International Corporation (SMIC) was officially approved by the China Securities Regulatory Commission (CSRC) on May 12, 2026.

Significance: This move is regarded as a crucial step in China’s semiconductor industry turnaround. It aims to expand advanced process capacity, integrate industrial chain resources, and strengthen independent controllability in global chip manufacturing.

Background: SMIC’s mainstream process is currently 14nm, with breakthroughs in 7nm but limited production capacity. Global leader TSMC has commenced mass production of 2nm chips, leaving a technology gap of about 3–4 generations between the two sides.

II. Semiconductor Sector Remains Strong with Massive Capital Inflow

Market Performance: As of the closing on May 12, 2026, the CSI Semiconductor Index rose by 2.05%. Net inflow of main capital over the latest 5 days reached RMB 49.231 billion, ranking first among all Shenwan Secondary Industries.

Leading Gainers: Multiple stocks including XinYuanWei, Huahai Qingke, Kaiweite, GuangLiWei and JinHaiTong surged by more than 10%.

ETF Performance: The STAR Market Chip Design ETF (589260) jumped nearly 6%, reflecting strong market attention to the chip design segment.

III. Domestic Equipment & EDA Software Achieve Group-Style Breakthrough

Hardware Breakthrough: Wanliyan, a subsidiary of Xinkailai, launched a new generation of ultra-high-speed real-time oscilloscope with bandwidth breaking 90GHz and a 500% performance improvement, breaking Western blockade in the high-end testing instrument sector.

Software Breakthrough: Domestically developed EDA software (chip design tools) released in the same batch delivers 30% higher efficiency than international benchmarks and can shorten chip development cycles by 40%, filling the domestic market gap.

Industrial Impact: These two achievements cover the testing and design links of chip manufacturing respectively, marking a major milestone for domestic substitution extending from manufacturing to the entire industrial chain.

IV. Dual Growth in Exports and Profits, Industry Accelerates Global Expansion

Export Data: In the first two months of 2026, China’s integrated circuit exports reached USD 43.3 billion, a year-on-year increase of 72.6%, far outpacing the overall export growth rate.

Corporate Profitability: In 2025, among 165 A-share listed semiconductor companies that disclosed net profits, 115 achieved profitability (nearly 70% of the total), and 46 hit their highest net profit level since 2019.

Overseas Revenue: A total of 59 semiconductor companies recorded combined overseas business revenue exceeding RMB 101.8 billion in 2025, a year-on-year increase of nearly 23%, with nearly 80% of enterprises posting revenue growth.

V. AI Drives Global Semiconductor Industry into High-Growth Cycle

Market Scale: The global semiconductor market is expected to exceed USD 1 trillion in 2026, with some institutions forecasting a peak of USD 1.6 trillion.

China Capacity Expansion: The number of mass-produced 12-inch wafer fabs in mainland China will rise from 62 at the end of 2024 to over 70 by the end of 2026, with monthly capacity reaching 3.21 million wafers.

Equipment Spending: Global semiconductor equipment sales are projected to hit a record high of USD 133 billion in 2025, driven mainly by surging demand for AI computing power.