Key facts
- Chinese chip stocks surged following an index reshuffle announcement.
- The index reshuffle is expected to attract billions in passive investment flows.
- TSMC forecasts sustained strong demand for artificial intelligence (AI) chips.
- Huawei's Ascend 910C chips were used to complete post-training for the DeepSeek-V4-Pro AI model.
- This advancement aims to reduce China's reliance on foreign technology amid US sanctions.
- Chinese stocks and the yuan exhibit their strongest correlation in three years.
- Optimism around artificial intelligence is fueling sentiment towards Chinese assets.
- A global investor push for diversification is also contributing to the trend.
Chinese chip stocks saw a substantial surge driven by news of an upcoming index reshuffle. This reshuffle is expected to attract significant passive investment flows, potentially injecting billions into the semiconductor sector and boosting its valuation. The positive market sentiment is further supported by Taiwan Semiconductor Manufacturing Company's (TSMC) projection of continued robust demand for artificial intelligence (AI) chips. This forecast highlights a strong and sustained market for advanced semiconductor manufacturing capabilities.
In a significant development for China's technological self-reliance, a research team that included Huawei successfully used the company's Ascend 910C chips to complete the post-training phase for the DeepSeek-V4-Pro AI model. This achievement represents a notable advancement in China's domestic capabilities for training complex AI models, a crucial step in reducing dependence on foreign technology, particularly in the face of ongoing U.S. sanctions. The successful application of Huawei's chips in this advanced AI task underscores the progress being made in China's semiconductor industry.