Investing.com– Shares in China’s chipmaking sector, particularly in the foundry sector, rose sharply on Tuesday as media reports pointed to progress in domestic lithography technology that could allow local players to circumvent US chip sanctions.
Semiconductor Manufacturing International Corp (HK: ) — the country’s largest chipmaker by capacity — jumped 7.4% in Hong Kong trading, while sunny optic (OTC:) Technology Group Co Ltd (HK:) rose 5.4%. Hua Hong Semiconductor Ltd (HK: ) added 3.4%.
Shanghai list Will Semiconductor Co Ltd Shanghai ( SS: ) and Shenzhen-listed NAURA Technology Group Co Ltd ( SZ: ) rose 1.5% to 2%.
Gains in Chinese chip stocks came after local media reported breakthroughs in Chinese chipmaking technology, particularly in extreme ultraviolet lithography — a key technology in producing chips below 7 nanometers.
Scientists at the Harbin Institute of Technology announced that they have developed a compact and stable EUV light source that can be further used to manufacture advanced 7nm chips.
Currently, the Dutch company ASML Holding NV (AS:) is the only major manufacturer of EUV lithography equipment and is prohibited from selling the technology to Chinese entities under current US sanctions.
But China, which is developing its own EUV technology, allows local chipmakers to sidestep US sanctions and develop advanced AI chips without relying on US technology.
The Biden administration recently announced the most aggressive round of sanctions against China’s chip industry, essentially blocking domestic developers from advancing computer technology.
This was done to slow China’s progress in the development of artificial intelligence, a sector that has come under the spotlight in recent years.
President Donald Trump, who took office on Monday, is expected to maintain his anti-China stance.
But shares in Chinese chipmaking, particularly in the foundry sector, rose on the prospect of increased domestic demand as Beijing also began encouraging businesses to source chips locally.