On March 23, escalating tensions between the U.S. and Iran pushed Brent crude oil prices above $110 per barrel, fueling global risk aversion and inflation concerns, which weighed heavily on the hard technology sector. The Huabao Shanghai Sci-Tech Innovation Board Chip ETF (589190), which focuses on comprehensive chip industry exposure, saw its on-market price drop by 4.79%, hitting a new low since its listing. Most stocks in the sector declined, with Semiconductor Manufacturing International Corporation, Hygon Information Technology, and VeriSilicon Microelectronics falling over 4%, while Cambricon Technologies and Montage Technology dropped more than 5%.
In industry news, Alibaba's DAMO Academy is set to launch a significant chip product tomorrow, potentially addressing the booming demand for AI Agent computing power this year. Public information indicates that on March 24, DAMO Academy will hold its annual 2026 Xuantie RISC-V Ecosystem Conference in Shanghai. Last year's conference saw the release of the industry's first server-grade RISC-V CPU.
Domestic computing power has achieved breakthroughs in chip performance, ecosystem development, and production capacity. On the demand side: as the largest source of AI computing power demand in China, major internet companies are expected to continue increasing capital expenditures in 2026, building on strong growth in 2025, driven by robust training and inference requirements. On the supply side: domestic chip manufacturers like Cambricon Technologies and Hygon Information Technology are rapidly closing the performance gap with NVIDIA at the single-card level. Meanwhile, domestic chipmakers are breaking through CUDA ecosystem barriers by adopting compatibility strategies and developing proprietary ecosystems.
Additionally, in the memory chip segment, explosive demand combined with rigid supply, along with labor strikes at Samsung Electronics, suggests that the memory chip super-cycle may persist. Guojin Securities points out that a triple resonance of "AI technological revolution + global capacity restructuring + breakthroughs in domestic substitution" could make China's memory chip industry chain the biggest winner in this cycle.
Despite recent pullbacks due to macroeconomic events, Galaxy Securities notes that the sector's fundamentals remain intact, with accelerated domestic substitution trends supporting long-term value. The long-term logic of high sector growth maintains strong certainty.
To capitalize on the chip industry's "super-cycle," high-volatility 20CM varieties are preferred. Public data shows that the Huabao Sci-Tech Innovation Chip ETF (589190) and its feeder funds (Class A 021224, Class C 021225) passively track the SSE Sci-Tech Innovation Board Chip Index, which includes 50 hard-tech companies involved in semiconductor materials and equipment, chip design, manufacturing, packaging, and testing. While providing full-chain exposure to the chip industry, the ETF maintains over 90% weight in core areas like integrated circuits and semiconductor equipment, reflecting high technological content and strong barriers to entry.
Data shows that as of the end of 2025, the SSE Sci-Tech Innovation Board Chip Index achieved an annualized return of 17.93% since its base date, significantly outperforming peers such as the STAR Market Semiconductor Index, the China Semiconductor Index, and the CSI All Share Semiconductor Index, while exhibiting smaller maximum drawdowns and better risk-adjusted returns.
Source: Shanghai and Shenzhen Stock Exchanges, etc. The Huabao Sci-Tech Innovation Chip ETF passively tracks the SSE Sci-Tech Innovation Board Chip Index, which has a base date of December 31, 2019, and was launched on June 13, 2022. The index's constituent stocks are adjusted according to its compilation rules; past performance does not indicate future results. The index's annual performance for the past five full years is as follows: 2021: +6.87%, 2022: -33.69%, 2023: +7.26%, 2024: +34.52%, 2025: +61.33%. Constituent adjustments are made per index rules; past performance does not guarantee future returns.
Institutional views sourced from: Guojin Securities report dated January 8, 2026, "18-Fold Surge in a Year! Why Is the Memory Chip 'Super-Cycle' So Frenzied?"; Galaxy Securities report dated March 16, 2026, "Weekly Semiconductor Sector Review丨Internal Divergence, Strong Performance in Electronic Chemicals."
ETF fee information: When subscribing or redeeming fund shares, subscription/redemption agents may charge a commission of up to 0.5%, including fees levied by stock exchanges and registration institutions. Feeder fund fee details: For Huabao SSE Sci-Tech Innovation Board Chip ETF Feeder Fund A, the front-end subscription fee is CNY 1,000 per transaction for subscriptions of CNY 2 million or more, 0.2% for subscriptions between CNY 1 million and CNY 2 million, and 0.5% for subscriptions below CNY 1 million. The redemption fee is 1.5% for holdings under 7 days and 0% for holdings of 7 days or more. Huabao SSE Sci-Tech Innovation Board Chip ETF Feeder Fund C charges no subscription fee; the redemption fee is 1.5% for holdings under 7 days and 0% for holdings of 7 days or more, with a 0.2% sales service fee.
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