The Hong Kong stock market's Semiconductors Sector saw an increase in the morning, as of the time of reporting, $HUA HONG SEMI (01347.HK)$up over 16%, $INNOSCIENCE (02577.HK)$Increased by over 12%,$HG SEMI (06908.HK)$Rise of over 8%,$SMIC (00981.HK)$Increased by nearly 8%.

On the news front, the China Semiconductor Industry Association issued an urgent notice on April 11 concerning the identification rules for the "origin" of semiconductor products. According to the relevant regulations from the General Administration of Customs, the origin of "Integrated Circuits" is recognized based on the change principle of the four-digit tariff number, meaning that the wafer fabrication site is considered the origin. It is recommended that the origin of "Integrated Circuits" be declared based on the location of the "wafer fabrication factory" for import customs declarations, regardless of whether they are packaged or unpackaged.

Zhaoyin International stated that on April 2, Eastern Time, the USA government announced a policy of reciprocal tariffs. On April 4, China released retaliatory tariff measures against the USA. Although this time the USA's "reciprocal tariffs" do not include semiconductors (excluding semiconductor equipment), we believe that the USA may introduce additional tariff policies targeting the Semiconductor Industry in the future. As geopolitical risks increase, we believe the trend towards domestic substitution in China's semiconductor sector is expected to accelerate, benefiting the Semiconductor Industry. It is advisable to pay attention to companies with strong domestic substitution attributes.

Editor/Rocky