Institutions expect little impact on the secondary market and existing enterprises.
On the 21st, the US Treasury Department released a 165-page draft intending to restrict investment in China's high-tech industry. The draft, called the "Proposed Rulemaking Notice," aims to restrict US entities from investing in China in the semiconductor and microelectronics, quantum information technology, and artificial intelligence high-tech fields, and lists detailed regulations.
Foreign media speculate that the investment restriction on China signed by US President Biden may take effect before the end of this year.
This rule is a detailed rule on the basis of the executive order signed by President Biden in August 2023, which mainly restricts some transactions of Americans/US institutions in China's semiconductor, quantum information technology, and artificial intelligence industries, including the acquisition of equity or equity, some convertible equity or debt financing that provides certain rights to lenders, conversion of equity, green field investment or other corporate expansion, joint ventures, and investment made by limited partners (LP) or equivalent status in non-US collective investment funds.
The rule does not restrict US capital investment in related publicly traded securities, does not look back on Chinese subsidiaries of US companies investing in China, and does not restrict Chinese wholly-owned subsidiaries fully controlled by US companies, so institutions expect little impact on the secondary market and existing enterprises.
CITIC Securities research believes that the US's current restrictions on China's semiconductor and artificial intelligence industries have gradually weakened, and there may already be expectations domestically, so the expected impact on the semiconductor industry will gradually decrease.
At present, the US's escalating restrictions on China's semiconductor and artificial intelligence industries are gradually weakening, and there may already be expectations domestically, so the expected impact on the semiconductor industry will gradually decrease.
CITIC Securities suggests continued attention to the new product layout and increased orders brought by advanced production capacity of domestic equipment, parts and materials enterprises in the "neck-holding" field. It is expected that the orders of domestic equipment companies will rapidly increase in the next 2-3 years. It is recommended to pay attention to the opportunities for domestic substitutes for advanced manufacturing of semiconductors, advanced packaging, and AI chips.
Enterprises related to independent innovation of semiconductors and domestic substitution:
Hua Hong Semiconductor (01347), Semiconductor Manufacturing International Corporation (00981), Shanghai Fudan (01385), Times Electric (03898), etc.