BEIJING (Reuters) – Shares of several Chinese companies linked to the semiconductor industry soared on Wednesday, driven by investor excitement over a government list that some are interpreting as a sign of progress in China’s efforts to develop domestic chip technology.
Shanghai Zhangjiang Hi-Tech Park Development and ShanghaiHighly Group both hit their daily limits of 10% gains at market close. Sanhe Tongfei Refrigeration, which has a wider trading band, reached the daily limit of 20%.
Shenyang Blue Silver Industry Automation Equipment ended the day up 10.7%.
The increase follows the September 9 publication by China’s Ministry of Industry and Information Technology (MIIT) of a guide promoting the use of key domestic technical equipment.
The MIIT guide specifically mentioned two models of lithography machines and recommended their use by state-based organizations.
Chip-making tools have become a focal point in China’s bid to develop its domestic semiconductor industry. This sector has faced significant challenges due to U.S. and allied restrictions on exports of advanced equipment to China, part of ongoing efforts to limit Beijing’s technological advances.
ASML (AS:), a Dutch company and one of the few global manufacturers of advanced lithography machines, is banned from selling its most advanced equipment to China.
Chinese companies, including Shanghai Micro Electronics Equipment (SMEE), have been actively developing domestic lithography capabilities.
However, industry experts say progress has been limited, underscoring the technological challenges China faces in this sector.
The most advanced of the two lithography machines listed, for which MIIT has not specified a supplier, has a resolution of 65 nanometers or better.
Resolution determines how small the features on a semiconductor chip can be made. Smaller resolutions make for more advanced, more powerful chips.
By comparison, ASML’s most advanced lithography machines currently achieve resolutions of 8 nanometers and less.
The 65-nanometer resolution machine mentioned in the MIIT list is at least 15 years behind international competitors, according to Leslie Wu, CEO of consultancy RHCC.
