Semiconductor Equipment Sector Surges; Domestic Substitution Thesis Continues to Be Validated

Keywords: semiconductor equipment, STAR Market, ETF, Microsoft earnings, memory chips

Introduction

In early trading on July 31, 2026, A-share semiconductor equipment stocks showed strong upward momentum. As of 9:34, HuaXia STAR Semiconductor Equipment ETF (588170) rose 9.80%, and HuaXia Semiconductor Equipment ETF (562590) rose 8.80%, both leading the market. This round of rally is driven by solid fundamentals and catalyzed by external events, drawing high market attention to the semiconductor equipment track.

Microsoft Earnings Beat Expectations, Global Computing Power Demand Further Validated

On the news front, Microsoft's fiscal 2026 Q4 earnings injected confidence into the market. The report showed quarterly revenue of $90 billion, up 18% year over year; operating profit of $40.6 billion, also up 18% year over year; and Azure cloud business revenue surged 43% year over year, with multiple core metrics exceeding market expectations.

Notably, Microsoft lowered its fiscal 2027 capital expenditure guidance from $190 billion to $175 billion. Although this adjustment appears bearish, the company's after-hours stock price quickly expanded gains to over 7%. The market interpreted this as reflecting improved efficiency and returns in Microsoft's AI computing power investment. The continued heavy investment by global tech giants in AI infrastructure is a long-term positive for the upstream chip and equipment supply chain. As a bellwether for global computing power demand, Microsoft's results provide strong fundamental support for the semiconductor equipment sector.

Domestic Equipment 'Shovel Seller' Logic Strengthens

Driven by the global chip industry recovery and the explosion in AI computing power demand, semiconductor equipment, as the 'shovel seller' upstream in the supply chain, is gaining increasing market recognition for its certain demand. On the market front, Yitao shares rose 12.94%, Oulai New Materials rose 12.69%, and Shen Gong shares rose 12.54%, with Qiangyi Shares, Weidao Nano, and other stocks following suit, indicating that capital is actively positioning in quality semiconductor equipment targets.

In this rally, HuaXia STAR Semiconductor Equipment ETF (588170) and its feeder funds (Class A: 024417; Class C: 024418) performed particularly well. This ETF tracks the only semiconductor equipment-themed index on the STAR Market, with distinctive differentiation: memory chip content exceeds 70%, CXMT concept content reaches 55%, and advanced packaging content is the highest in the market (about 60%), focusing on hardcore equipment companies at the forefront of technological innovation. This configuration gives it significant high-beta characteristics against the backdrop of the accelerating rise of domestic memory chips and advanced packaging industries.

Meanwhile, HuaXia Semiconductor Equipment ETF (562590) and its feeder funds (Class A: 020356; Class C: 020357) also offer outstanding allocation value. This ETF tracks the CSI Semiconductor Materials and Equipment Theme Index, with semiconductor equipment content the highest among all-market indices (about 66%) and CXMT concept content also the highest among all-market indices (61%). It directly benefits from the certain demand for equipment makers arising from the global chip price upcycle. As global chip supply-demand remains tight, equipment makers, serving as 'water sellers' in the supply chain, have seen their earnings growth certainty fully confirmed by the market.

Industry Chain Resonance Highlights Sector Allocation Value

From an industry chain perspective, the semiconductor equipment sector is in a window of multiple positive factors: on one hand, chip demand driven by global AI computing power infrastructure construction continues to grow; on the other hand, the domestic substitution process is accelerating, with capacity expansion in domestic memory chips and advanced packaging opening broad growth space for equipment companies. The rapid development of leading companies such as CXMT provides a steady stream of orders for related equipment suppliers.

In terms of market performance, this round of collective gains in the semiconductor equipment sector is not an isolated short-term speculation but the result of the resonance between industry trends and capital consensus. The strong performance of HuaXia STAR Semiconductor Equipment ETF and HuaXia Semiconductor Equipment ETF reflects the market's full recognition of the long-term theme of semiconductor equipment localization. As the global technology competition landscape undergoes profound changes, the strategic and investment value of the semiconductor equipment sector is being repriced by the market.

Conclusion

In summary, Microsoft's better-than-expected earnings once again validate the strong trend of global AI computing power demand. As a core upstream link in the industry chain, semiconductor equipment demonstrates outstanding allocation value under the dual logic of a booming global chip industry and accelerated domestic substitution. With their precise index positioning and outstanding track purity, HuaXia STAR Semiconductor Equipment ETF (588170) and HuaXia Semiconductor Equipment ETF (562590) provide investors with efficient tools to capture opportunities in the domestic semiconductor equipment industry. Looking ahead, as domestic memory chips and advanced packaging industries continue to expand, the semiconductor equipment sector is expected to maintain high prosperity, and the allocation value of related ETFs deserves continued attention.