Quarterly Earning Update – Global X China Semiconductor ETF (3191) (Revised)

Industry Update

China semiconductor self-sufficiency trend is accelerating and gaining traction. Semiconductor equipment sector rallied on bullish capacity outlook. According to Yole Group, China is poised to overtake Taiwan as the world’s top semiconductor foundry hub by 2030. With 21% of global capacity in 2024 and rapid domestic expansion underway, this ambitious build-out, spread over a 5-year timeline, represents about one-third of the expected world fab investment. Current Chinese wafer fab equipment (WFE) spending – which is another way to measure the same thing – is currently about 30% of the worldwide spending. (Yole Group, July 2025)

Concurrently, Beijing steps up to bolster domestic semiconductor industry and reduce external dependencies. According to FT, The Cyberspace Administration of China (CAC), China’s internet regulator, has banned the country’s biggest technology companies, including ByteDance and Alibaba, to end their testing and orders of the RTX Pro 6000D, Nvidia’s tailor-made product for the country. (Financlial Times, September 2025)

This push for self-sufficiency is further evidenced by major investments and consolidation within the industry. Yangtze Memory Technologies Co (YMTC), China’s top flash memory maker, has established a substantial US$3 billion venture in Wuhan to double down on next-generation NAND chips. The new venture, led by YMTC chairman Chen Nanxiang, was incorporated with a registered capital of 20.7 billion yuan (US$2.9 billion). YMTC held a 50.2% stake in the venture, while state-run Hubei Changsheng Phase III Investment Development Co owned the rest. (Yangtze Memory Technologies Co., September 2025)

In parallel, a significant consolidation is underway within the foundry sector, as China’s second-largest foundry, Hua Hong Semiconductor, seeks to acquire a controlling stake in Shanghai Huali Microelectronics (HLMC) via a combination of share issuance and cash, along with a supporting capital raise (Trendforce). The deal, aiming to resolve the industry-competition issue Hua Hong pledged to address at its IPO, would rank among the largest consolidations in China’s semiconductor industry in recent years if completed, as per EETimes China. (Trendforce, Company Data, EETimes China, September 2025)

Quarterly Earnings Review

Cambricon – The company reported strong 2Q25 results where revenues sequentially increased by 59% to Rmb1.8bn, net income of Rmb 683m was well ahead of the street. Cambricon remains as the best-alternative to Huawei and profiting from the local-for-local trend. (Company data, Septemeber 2025)

SMIC – The company provided upbeat 3Q guidance. SMIC’s 3Q25 revenue guidance is +5-7% Q/Q, driven by increases in both wafer shipment and blended ASP. Management noted that they will still run at a high UTR thanks to robust orders, especially on the power discrete platform. With UTR expected to remain high, the depreciation burden from capacity expansion should ease. Therefore, SMIC guided 3Q25 GM to be 18-20%. (Company data, Septemeber 2025)

Naura – 2Q25 revenue was RMB 7,936mn, YoY+23%. Dry Etch/Deposition/RTP reached more than 5/6.5/1bn in 1H25, accounting for 31%/40%/6% of total revenue. Note that this print has not yet reflected the Kingsemi M&A impact, the P&L consolidated will start from 3Q25’s financial reports. Management indicated advance logic and memory expansion could be 25%/30% respectively in 2026. (Company data, Septemeber 2025)

AMEC – 2Q25 revenue was RMB 2,787mn, while 2Q24 order was RMB 2,550mn, exceeding orders one year before by 9.3%. Of RMB 4,961mn revenue in 1H25, Dry Etch was RMB 3,781mn, accounting for 76.2%, while LPCVD is ramping up fast to RMB 199mn, about 4% of total. (Company data, Septemeber 2025)

Horizon Robotics – Horizon total chip shipments doubled YoY in 1H25, to 1.98mn units – including nearly 50% from AD products (vs. <20% in 1H24), thanks to major customers BYD and Li Auto, which combined accounted for >50% of Horizon’s AD shipments. Horizon also secured several global projects from two Japanese OEMs (7.5mn projected shipment over life cycle), and 30 projects from nine JV brands in China. Horizon reported an adjusted net loss of Rmb1.3bn in 1H25, widening from Rmb804mn in 1H24, owing to lower GPM from product mix shift and higher R&D spending. (Company data, Septemeber 2025)

Preview

Increasing AI adoption in the data centre and increasing penetration of AI at the edge and on-device will be the key enabler of next upcycle semiconductor as AI-enabled devices have much higher semi-content. We expect volume growth in end devices to drive broad-based semiconductor cycle recovery in 2025. (Mirae Asset, 2025)