The A-share market reached a fever pitch on May 25, 2026, as China’s premier tech indices surged to multi-year highs. The ChiNext Index reclaimed the 4,000-point threshold, while the STAR 50 index—the standard-bearer for China’s hard tech ambitions—skyrocketed by nearly 6% in a single session. This rally was fueled by a staggering 3.21 trillion RMB in daily turnover, signaling a robust return of domestic liquidity and a decisive shift in investor confidence.
At the heart of the frenzy was a massive rotation into the semiconductor supply chain, catalyzed by comments from Huawei’s semiconductor chief, He Tingbo. Speaking at a major international circuit symposium, He revealed that the upcoming Kirin mobile processor will utilize "logic folding" technology to achieve significant performance gains. This architectural innovation represents a critical move in Beijing’s pursuit of semiconductor self-sufficiency, aiming to bypass certain lithography constraints through advanced design and packaging.
The optimism extended beyond traditional silicon into materials science, specifically regarding the commercial application of diamond-copper composites. Recently implemented at the Zhengzhou Supercomputing Center, these materials reportedly improve chip module heat dissipation by 80% and overall performance by 10%. As artificial intelligence demands higher power density, breakthroughs in thermal management are becoming as valuable to the market as the processors themselves.
Institutional analysts are now characterizing this movement as the third phase of a structural bull market. Unlike the initial stages driven by valuation recovery or policy speculation, this phase focuses on "growth acceleration." Investors are becoming more discerning, moving away from broad-based bets to favor companies that can demonstrate tangible earnings potential and unique technological moats in the global AI hardware race.
Despite the domestic focus, the shadow of global giants like Nvidia and Google remains influential. Strong earnings in the West and the expansion of AI ecosystems have validated the long-term demand for high-end computing power. Chinese domestic players in the optical module and PCB sectors are increasingly viewed as essential components of a global, albeit increasingly bifurcated, technology supply chain that shows no signs of slowing down.