China's AI Chip Leader Cambrian Surges Over 19%, Market Cap Exceeds 500 Billion Yuan; STAR 50 Index Hits Over Three-Year High

TradingKey - On August 22, Chinese A-share chip stocks witnessed a significant rally, led by Cambrian, which surged over 19% during intraday trading to surpass 1,200 yuan per share, marking a new historical high and pushing its market capitalization beyond 500 billion yuan.

The strong performance of heavyweights like Cambrian, Hygon, and SMIC propelled the STAR 50 Index to rise over 7% at one point, reaching its highest level since March 7, 2022. Meanwhile, the Shanghai Composite Index climbed 0.77% in the afternoon, breaking the 3,800-point mark, hitting its highest level in nearly a decade.

On the news front, DeepSeek announced the release of DeepSeek-V3.1 on August 21, describing it as the first step towards the Agent (intelligent agent) era. The upgrade utilizes UE8M0 FP8 Scale parameter precision, with UE8M0 FP8 specifically designed for the upcoming next-generation domestic chips.

CITIC Securities believes that training and inference based on the DeepSeek model are likely to see increased application on domestic AI chips, providing a boost to Chinese chip stocks.

Additionally, reports this month indicated that the first domestically produced commercial electron beam lithography machine, "Xizhi," has entered application testing. This equipment, suitable for small-batch production of high-end chips, achieves a precision of 0.6nm and a line width of 8nm, comparable to international mainstream equipment. This technological breakthrough provides support for the development of the ASIC chip industry.

In terms of fundamentals, Cambrian has shown improvements in recent quarters. The company achieved its first-ever quarterly profit in Q4 2024 since its listing, and continued to grow in Q1 2025 with quarterly revenue reaching 1.111 billion yuan, up 4230.22% year-on-year, reversing a long-standing deficit.

Recently, several brokerage firms expressed optimism about the outlook for China's semiconductor sector. According to a research report by Tianfeng Securities, the semiconductor supply chain equipment and materials exhibited stable growth in July, with chip foundry capacity continuing to rise, sustaining the positive momentum in the semiconductor market.

CITIC Securities' report noted that although domestic AI computing power infrastructure investment was previously impacted by supply chain issues, current strong domestic demand and a widening computing power gap suggest that the pace of domestic deployment is likely to resume or accelerate.