0250 GMT - Chinese chip foundries are benefiting more from localization demand than expected, Morningstar analyst Phelix Lee says in a note. The U.S. tariffs didn't hurt their full-year forecasts as much as feared, while they also benefit in 2Q from front-loading ahead of higher tariffs, the analyst says. SMIC and Hua Hong Semiconductor are more upbeat than their global peers on both short-term and long-term views, Lee says. "Faster upgrade cycles of consumer goods in China, and market share gains by Chinese players in electric vehicles, networking, and industrial equipment sectors are key factors," he says. However, the analyst says both firms are still relying on external financing to fund expansion, and the stocks are overvalued. SMIC's H shares are down 2.9% and Hua Hong declines 7.8%. (sherry.qin@wsj.com)

(END) Dow Jones Newswires

August 10, 2025 22:50 ET (02:50 GMT)

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