Surge in China’s Semiconductor Equipment Makers as State Support Grows Amid Huawei Investigation

China’s semiconductor equipment makers experienced a significant surge in their stock prices as the US government’s investigation into chips used for Huawei Technologies Co.’s latest smartphone sparked expectations of increased state support for the sector. The rise in stock prices occurred on Friday and was predominantly driven by companies associated with lithography equipment, which is considered a vulnerable aspect of China’s chip supply chain. In an effort to reduce dependence on foreign-made equipment, Beijing has been aggressively encouraging domestic firms to develop local technologies, given that prominent Chinese chipmakers such as Semiconductor Manufacturing International Corp. and Hua Hong Semiconductor Ltd. rely on imported equipment. This recent development signifies a potential shift in China’s semiconductor landscape as the government aims to strengthen local manufacturing capabilities in strategic sectors such as semiconductors.