Storage Price Hikes, Wafer Capacity at Full Utilization, Chip Cycle Reversal! How Does Guotai's Science and Technology Chip ETF Benefit Across the Entire Chain?

AI Inquiry · How Demand for AI Is Reshaping the Semiconductor Industry Cycle?

On March 18, the Asia-Pacific storage chip concept stocks surged across the board: A-share companies such as Youze Technology and Langke Technology hit the daily limit with a 20% increase, while Bawei Storage rose over 10% intraday, reaching a new high in stock price.

Behind this collective sector movement is a definitive reversal in industry fundamentals: storage chip prices are rising across the board, packaging and testing companies are following suit with price hikes, and wafer fabs are operating at full capacity. These three key signals indicate that the global semiconductor industry is gradually emerging from its previous downturn, signaling a clear turnaround in prosperity. Unlike past short-term rebounds caused by uncoordinated capacity expansion, this cycle is supported by long-term AI-driven demand and cautious supply-side capacity increases by industry giants, resulting in a more sustained boom. The entire chip industry chain is expected to benefit from simultaneous volume and price growth, leading to significant performance gains.

Storage Giants Calmly Expand Capacity, Laying the Foundation for a Sustained Cycle

Storage chips are the starting point and core anchor of this semiconductor cycle reversal. Over the past year, storage chips have experienced an unprecedented price surge, with DDR5 memory spot prices increasing over 300%, and 256GB DDR5 server memory modules breaking through 40,000 yuan. According to Rongzhong Consulting, storage chip prices are expected to rise another 40%-50% in Q1 2026, with a further 20% increase in Q2.

Samsung Electronics has explicitly stated that the memory shortage may persist until 2028, and the company will strictly plan capacity based on demand to avoid overexpansion. SK Hynix, despite benefiting from the surge in AI storage demand, remains cautious in capacity expansion. Leading manufacturers’ capacity control strategies fundamentally prevent the supply overshoot seen in previous cycles, bringing a more sustainable prosperity to this round of the semiconductor industry.

Early Price Hikes in Packaging and Testing Signal Clear Cycle Transmission

Price increases are rapidly spreading from storage core segments to packaging and testing. Driven by dual demand from AI chips and storage chips, companies with advanced packaging technology are taking the lead in pricing power. Since early 2026, many storage chip packaging and testing firms have seen significant order growth, with capacity supply pressures intensifying. Leading companies like ChipMOS and Powertech plan to further raise prices by 30%.

Meanwhile, demand for Chiplet and 2.5D/3D advanced packaging in AI chips continues to explode. Domestic top packaging and testing firms’ capacity for advanced packaging is already tight, with order lead times extending. As the bridge connecting wafer manufacturing and end applications, the price hike signals confirm that demand has propagated to the very end of the industry chain, with the scope of the cycle recovery exceeding expectations.

Wafer Fabs Fully Max Out Capacity, Mature Processes Follow Price Increases

If price hikes in storage and packaging/testing are demand signals, then wafer fab capacity utilization and price increases are concrete evidence of supply-demand reversal. Since late 2025, SMIC has announced price increases to downstream clients, with 8-inch BCD process platform prices rising nearly 10%. By 2026, wafer fab capacity tightness will intensify further. TrendForce forecasts that the global 8-inch wafer foundry capacity utilization will reach 85%-90% in 2026, significantly higher than 75%-80% in 2025.

The current price increase wave has fully spread into mature process segments. Foundries like UMC, World Advanced, and Powerchip plan to initiate new price hikes in 2026. This price increase in mature processes confirms that supply-demand imbalance has shifted from localized to widespread, validating the industry cycle reversal at its core.

Full-Chain Price Transmission Confirms Cycle Reversal Trend

As wafer foundry costs continue to rise, cost pressures are spreading downstream. Some IC design companies have already begun raising prices, forming a full-chain transmission from upstream equipment and materials, wafer manufacturing, packaging/testing, chip design, to downstream applications.

This indicates that the current industry recovery is no longer limited to storage alone but involves a comprehensive uptrend across the entire semiconductor supply chain. The cycle reversal trend is validated across the industry chain, reversing the previous two years of industry downturn and weak demand.

AI Demand as the Core Driver, Breaking Traditional Cycle Limits

Unlike past recoveries driven solely by consumer electronics demand, this semiconductor upturn is primarily fueled by the long-term, rigid demand generated by the explosive growth of AI industries.

Large-scale AI data center construction continues to boost demand for HBM, DRAM, NAND Flash, and other storage chips. Simultaneously, foundry demand for inference chips, automotive-grade chips, and industrial control chips is exploding. These new demands are characterized by strong sustainability and large scale, enabling the semiconductor industry to break free from the cyclical volatility of over-reliance on consumer electronics. Compared to previous short cycles of 1-2 years, this cycle’s upward trend is more sustained, with higher certainty in performance realization.

Domestic Chip Industry Enters a Golden Window, Accelerating Substitution

The tight supply chain situation has created a golden window for domestic chip substitution. As a core high-tech manufacturing hub, China relies heavily on imports of storage chips and semiconductor products, making supply chain security an urgent priority.

During this industry upswing, overseas wafer fabs and storage manufacturers are operating at full capacity, with delivery times extending. Downstream companies are diversifying their supply sources to ensure stability, providing domestic chip firms with excellent opportunities for product validation, customer onboarding, and market share expansion. Domestic storage manufacturers have achieved technological breakthroughs, and domestic chip companies are experiencing a dual opportunity of volume and price growth.

For ordinary investors, the Guotai Sci-Tech Chip ETF (589100) closely tracks the SSE Sci-Tech Innovation Board Chip Index (000685), offering a convenient, index-based investment tool to capture the full chain benefits of the chip cycle reversal. The index selects up to 50 leading companies across the entire semiconductor industry chain—materials, equipment, design, manufacturing, and packaging/testing—covering core beneficiaries of this cycle reversal, including storage chips, wafer foundries, advanced packaging, and semiconductor equipment. Key constituents include SMIC, Microchip, Lankuo Technology, Haiguang Information, and Cambrian, among others, with prominent industry leaders positioned to benefit from both industry recovery and accelerated domestic substitution, providing comprehensive coverage of the full chip industry chain.

Currently, the chip industry is in the early stage of cycle reversal, with an upward trend in prosperity already clear. However, full industry chain performance realization is still ongoing, and the sector remains attractive for allocation. Investing via the Guotai Sci-Tech Chip ETF (589100) allows investors to broadly capture the rising opportunities across the entire industry chain and effectively diversify risk from individual stocks, making it a prudent and efficient choice aligned with current industry trends.

Guotai Sci-Tech Chip ETF (589100): One-click exposure to the entire domestic “core” chip ecosystem, bundling leading companies across the full semiconductor industry chain.

Risk Reminder: Investment involves risks. Past performance does not predict future results. The performance of the index and the fund’s past results do not guarantee future performance. This content is for industry and product objective description only and does not constitute investment advice. Investors should fully understand the product’s risk and return characteristics and make cautious decisions based on their own risk tolerance.