Hong Kong Semi Stocks Surge After Huawei Says It Has Way to Match Leading Chips

By Sherry Qin

Hong Kong semiconductor stocks surged after Huawei's new design approach raised hopes that Chinese chipmakers can close gap with foreign counterparts, despite U.S. export restrictions.

Shares of SMIC, China's largest contract chip maker, rose as much as 16% early Tuesday while Hua Hong Semiconductor--the No. 2 foundry--advanced 14%.

Hong Kong's Nasdaq-like Hang Seng Tech Index was up 1.8%.

The gains came after Huawei on Monday said it has developed an approach that would allow it to make more-advanced chips without the use of equipment the U.S. has blocked it from accessing.

The advancement could be "another DeepSeek moment," Bernstein analysts said, referring to the Chinese startup that made waves when it released an AI model that can perform on par with leading Western ones.

Huawei's approach offers an alternative roadmap for local chip companies to keep progressing despite the U.S. trade curbs that have restricted China's access to advanced semiconductor technologies since 2022.

If executed successfully, the leap forward will generate massive upside for China's semiconductor sector, Bernstein said, inspiring confidence among the industry in investing in building a local ecosystem.

By 2031, Huawei expects to design high-end chips that match the transistor density of those manufactured with a 1.4-nanometer process seen as the next frontier for cutting-edge chips.

Intel, Taiwan Semiconductor Manufacturing and Samsung Electronics are all aiming to mass-produce 1.4-nanometer semiconductors within the next few years.

Semiconductor stocks listed in China pulled back on Tuesday as investors locked in the massive gains made the previous session following Huawei's announcement. The Hong Kong stock market was closed Monday for a holiday.

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

May 25, 2026 23:10 ET (03:10 GMT)