A-Share AI Chipmakers Surge as ChiNext Index Breaches 4200 for the First Time
A-Share Computing Hardware and Semiconductor Industry Chain Surges: ChiNext Index Hits Historic High of 4,200 Points—Technical Breakout Aligns with Global Capex Momentum
On the morning of June 3, the ChiNext Index closed at 4,216.74 points—a single-day surge of 3.97%—breaking decisively above the symbolic 4,200-point threshold for the first time since its inception in 2010, marking an all-time high. Notably, core AI optical module stocks—including InnoLight, TFC Communications, and New Bright Optoelectronics—simultaneously reached new all-time highs; Cambridge Industries Group and Hengtong Optic-Electric hit daily trading limits (10% up), while Lianxun Instruments’ share price breached the RMB 2,000 mark. Meanwhile, industry leaders in advanced packaging and wafer manufacturing—such as JCET, Liangang Microelectronics, and TFME—also collectively surged to their daily limits. This broad-based rally, driven by computing hardware and the semiconductor value chain, is no isolated event. Rather, it reflects a powerful confluence of three structural forces: accelerating global AI infrastructure investment, deepening domestic substitution, and a systemic upward revision in China’s industrial capital expenditure.
Global AI Compute Demand Exceeds Expectations: Transitioning from “Proof-of-Concept” to “Scale Deployment”
The market has widely underestimated the sheer intensity of underlying hardware demand generated by large-language model (LLM) training and inference. According to TrendForce’s latest forecast, global AI server shipments will surge 58% year-on-year in 2024, reaching 1.6 million units. Each AI server typically integrates 8–16 high-end GPUs, alongside 4–8 high-speed optical modules (e.g., 800G/1.6T), 2–4 high-bandwidth memory (HBM) chips, and custom AI chip packaging solutions. This signals a decisive shift—from lab-scale experimentation to large-scale, data-center-level deployment. U.S.-based Cloudflare and Europe’s OVHcloud have recently announced multi-billion-dollar AI infrastructure budget increases; meanwhile, China’s three major telecom operators raised their 2024 compute-related capex by over 45% YoY, with optical module procurement budgets climbing 62%. This rigid, sustained, and quantitatively explosive demand flows directly upstream: InnoLight shipped 32% of the world’s 800G optical modules in Q1 2024, with orders already booked through Q4; TFC Communications maintains 100% utilization of its high-speed optical engine production capacity. Such demand certainty forms the most solid fundamental anchor underpinning this rally.
Deepening Domestic Substitution: From “Functional” to “High-Performance”—Rapid Convergence of Technology Gaps
Over the past three years, domestic optical module and advanced packaging manufacturers have achieved a pivotal leap—from “catching up” to “running neck-and-neck.” Take InnoLight: its 1.6T silicon photonics module yield has reached 85%, up 30 percentage points from 2023, with power consumption reduced by 22%; it has secured initial orders from Microsoft Azure’s next-generation AI cluster. In semiconductor packaging, JCET’s Chiplet 2.5D packaging yield has surpassed 92%, successfully entering the supply chain for select NVIDIA edge-AI chips; TFME has completed AMD MI300X packaging validation, becoming the only domestic OSAT certified for this platform. As technology gaps narrow rapidly—and amid mounting geopolitical pressure driving global supply-chain restructuring—Chinese suppliers are shifting from “backup options” to “first-choice partners.” Per Wind data, overseas Tier-1 cloud providers’ procurement share from Chinese optical module vendors rose to 41% in Q1 2024, up 15 percentage points YoY. Domestic substitution is no longer a policy-driven, passive choice—it is now an active commercial decision grounded in performance, cost efficiency, and delivery reliability.
Upward Revision in Industrial Capex: From “Wait-and-See” to “Race-to-Deploy”—A Self-Reinforcing Funding Cycle
Another key catalyst behind this rally is the systemic upward revision in industrial capex. Unlike cyclical sector investments, AI compute infrastructure carries strong network effects and first-mover advantages—delaying deployment by just six months risks forfeiting critical model iteration windows. Consequently, domestic IDC operators, AI startups, and large tech platforms are aggressively securing capacity ahead of schedule. According to data released by China’s Ministry of Industry and Information Technology (MIIT), integrated circuit (IC) manufacturing investment nationwide surged 38.2% YoY in January–April 2024, with investment in advanced packaging and high-speed interconnect equipment rising sharply by 67%. Secondary-market funds responded swiftly: the STAR Market 50 Index soared 4.78% in a single day—the largest intraday gain in two years—while Northbound funds injected over RMB 8.6 billion into the semiconductor sector over the past five trading days. Crucially, this capital inflow is not mere thematic speculation: InnoLight’s forward P/E (2024E) stands at 32x—below its 3-year average of 38x; TFC Communications’ forward PEG (2024–2026E) is 0.89—well below the reasonable threshold of 1.0 for growth stocks. Improving alignment between valuation and fundamentals bolsters the rally’s sustainability.
ChiNext Breaks Above 4,200 Points: Dual Significance—Technical & Sentimental
As the premier benchmark for A-share technology and growth equities, the ChiNext Index’s historic breach of 4,200 points carries profound symbolic weight. Technically, this level represents a strong resistance zone—the previous peak in 2021 stood at 4,215 points—and its successful breakthrough implies a definitive reversal of the long-term downtrend. The weekly MACD has generated a golden cross, backed by robust volume (morning session turnover reached RMB 1.9 trillion). Sentimentally, the simultaneous record highs among index heavyweights have created a powerful demonstration effect, prompting capital reallocation from low-volatility blue chips toward high-beta technology and growth stocks. Currently, the valuation gap between the CSI 300 and the ChiNext Index sits at the 92nd percentile historically—leaving ample room for style rebalancing. However, structural divergence warrants caution: Hong Kong tech stocks declined on the same day—the Hang Seng Tech Index fell 2%—reflecting short-term portfolio rebalancing by Southbound funds and persistent valuation pressure. A-share tech valuations may thus compress relative value in Hong Kong, particularly amid divergent liquidity conditions.
Key Forward-Looking Indicators: Capacity Ramp-Up Pace & Global Compute Policy Coordination
Two near-term variables merit close monitoring:
- Ramp-up progress of 800G/1.6T optical module capacity: Should yields fail to stabilize above 80% in Q3, order re-allocation could occur.
- Timing of U.S. CHIPS and Science Act Phase II subsidy guidelines: Their release will significantly influence global advanced packaging capacity planning.
Looking further ahead, AI computing hardware is transitioning from a “seller’s market” to a competition defined by dual moats—technology and service. Firms with vertical integration capabilities (e.g., InnoLight’s in-house laser diode chip design) or deep co-development partnerships with customers (e.g., TFC Communications’ joint optical engine lab with Meta) stand to capture outsized returns. The ChiNext Index’s breakout is more than just a technical milestone—it is a phase-defining declaration: China’s hard-tech industry is evolving from a “follower” into a “standard-setter.”