Shares of Chinese semiconductor companies posted double‑digit gains on Monday. The catalyst for the broad rally was Huawei’s announcement of a technological breakthrough in advanced chip design that would reduce China’s dependence on Western technologies amid US sanctions.
Huawei unveiled the concept of the Tau Scaling Law. The strategy shifts the focus away from physically shrinking transistors toward a radical increase in system efficiency.
The company announced an architecture called LogicFolding, which would debut in Kirin processors later this year. The innovation aims to shorten on‑chip interconnects. Huawei forecasts that the technology will enable it to reach transistor densities equivalent to an advanced 1.4‑nanometer process within five years.
Claims of technological self‑sufficiency triggered aggressive buying of domestic chipmakers’ shares on the Shanghai and Shenzhen exchanges. The best performers included:
Piotech Inc: +18%
Semiconductor Manufacturing International Co (SMIC): +17%
Cambricon Technologies: +10%
Qingdao Yunlu Advanced Materials: +9%
Hwatsing Technology: +8%
Institutional investor sentiment reflects an accelerated shift of China’s IT industry toward domestic resources. Against the backdrop of tightened US export controls on AI accelerators from Nvidia Corp., Chinese AI developers (including DeepSeek) have begun a broad migration to homegrown hardware solutions. Nowadays, Huawei’s Ascend AI chip lineup is the main domestic alternative to American processors.
