Chinese stocks, which had risen the previous day, fell across the board on July 28. News that China has localized the DUV (Deep Ultraviolet) lithography equipment, a key tool in semiconductor manufacturing, was perceived as a negative factor.
On this day, the Shanghai Composite Index closed down 1.16% at 3,813.31, the Shenzhen Component Index fell 4.52% to 13,509.68, and the ChiNext Index dropped 7.35% to 3,327.03.
Before the market opened, U.S. IT media outlet The Information reported that a Chinese semiconductor equipment company is manufacturing DUV lithography machines, with plans to ship five units this year and 20 next year. Although the successful localization of DUV equipment was seen as a major positive development, the stock market could not escape declines, particularly in semiconductor stocks. The ChiNext and Star Market, which are heavily populated by semiconductor companies, both plummeted by over 6%.
The localization of DUV technology is a significant development that could reshape the industry, causing a strong shock to global markets. Dutch lithography equipment maker ASML saw its shares drop by 8%, while Samsung Electronics and SK Hynix both fell by more than 10%.
While the localization of DUV technology is a boon for China's semiconductor industry, the market interpreted it as a short-term material loss, given the previous optimism surrounding technological self-sufficiency. This led to a wave of profit-taking.
Additionally, there are assessments that China's DUV localization could lead to a restructuring of the global semiconductor supply chain, which has been viewed as increasing market uncertainty. Analysts suggest that foreign investors are offloading Chinese semiconductor stocks as a risk-averse strategy in light of this uncertainty. Semiconductor firm Zhaoyi Innovation hit its lower limit, and Furan Guofen also fell by over 10%. The significant drop in the Chinese semiconductor sector contributed to a broader decline in technology stocks, resulting in a notable decrease in the Chinese stock market.
In contrast, stocks related to lithography equipment surged. Companies such as Boshang Guangdian, Dianke Shuzi, and Aopu Guangdian reached their upper limits. Despite the downturn in the semiconductor sector, stocks associated with lithography equipment rose sharply following the news of successful DUV localization.
The liquor sector also saw gains. Jinzhongzi Liquor hit its upper limit, and Huangtaijiuye recorded a significant increase. Reports that direct sales outlets in Beijing and Shanghai have been continuously raising the selling price of Moutai contributed to this positive trend. In major cities, the price for a 500ml bottle is set at 1,719 yuan, higher than the online platform price of 1,639 yuan, indicating a revival in demand for Moutai.
Meanwhile, the People's Bank of China announced a daily reference exchange rate of 6.7928 yuan per dollar, an increase of 0.0017 yuan from the previous day, reflecting a 0.03% decline in the value of the yuan.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.