Core Insights - The report highlights the accelerating competition and cooperation in advanced manufacturing between China and the US, particularly in the semiconductor, general aviation, and innovative pharmaceuticals sectors [6][11][18]. Semiconductor Industry - China is rapidly catching up in the semiconductor sector, focusing on self-sufficiency in AI chip production amidst a global supply chain heavily dominated by the US [2][19]. - The semiconductor industry has a complex global supply chain with multiple stages, where the US leads in high-value design and equipment, while China excels in manufacturing and testing [19][24]. - In terms of market share, China and the US together account for nearly 60% of global semiconductor sales, with the US holding a significant supply share of over 50% compared to China's less than 10% [22][24]. - China's semiconductor trade has been in a long-term deficit, with a projected deficit of $226.67 billion in 2024, while the US maintains a trade surplus of $10.25 billion [27][28]. - US semiconductor companies exhibit stronger fundamentals, with revenue and net profit significantly higher than their Chinese counterparts, and a return on equity (ROE) median approximately four times that of A-share companies [31][32]. General Aviation Industry - The US holds a first-mover advantage in the general aviation sector, while China is leveraging low-altitude economic policies to drive innovation and transformation [3][12]. - The global demand for general aviation aircraft is evenly distributed, with China and North America each accounting for about 20% of the market, but the US dominates supply with Boeing and Airbus [3][12]. - China's aerospace sector has a long-term trade deficit, while it is a leading exporter of drones [3][14]. - Current market performance shows that US aviation equipment companies outperform their Chinese counterparts in terms of scale and ROE [3][14]. Innovative Pharmaceuticals Industry - The US leads in the innovative pharmaceuticals sector, but Chinese companies are making significant strides in original innovation and international expansion [4][17]. - The pharmaceutical market share remains stable, with the US holding about 40% and China around 10%, primarily focusing on generic drugs [4][17]. - Both countries face trade deficits in pharmaceuticals, but Chinese innovative drug companies have accelerated their international presence, with increasing license-out revenues [4][19]. - US innovative pharmaceutical companies show better fundamentals, with many Chinese companies' valuations hovering around historical averages [4][20]. Market Outlook - The report anticipates a continuation of the mid-to-long-term technology market trends, with advanced manufacturing sectors like semiconductors, general aviation, and innovative pharmaceuticals presenting significant investment opportunities [7][18].

Group 1: ETF Performance - The Sci-Tech Chip ETF had a turnover rate of 5.7% during the trading session, with a transaction volume of 1.81 billion yuan [3] - Over the past two weeks, the ETF's scale increased by 580 million yuan, ranking first among comparable funds [3] - In the last month, the ETF's share increased by 1.371 billion shares, also ranking first among comparable funds [3] - In the last 23 trading days, there were net inflows on 16 days, totaling 2.708 billion yuan [3] - As of July 31, the ETF's net value rose by 60.91% over the past year, ranking first among comparable funds [3] - The ETF's highest single-month return since inception was 25.18%, with the longest consecutive monthly increase being 4 months and an average monthly return of 8.19% [3] Group 2: Industry Insights - Ping An Securities noted that the smart driving SoC chip industry is accelerating its upgrade, presenting historic development opportunities for domestic suppliers [3] - Domestic chip companies with independent IP development capabilities and automotive-grade mass production experience are expected to dominate the mid-to-high-end smart driving chip market [3] - Guosen Securities indicated that the U.S. AI action plan may further restrict semiconductor exports, promoting self-sufficiency in domestic manufacturing, equipment, and materials [4] - Google raised its annual capital expenditure to 85 billion USD, driven by the growing demand for AI infrastructure [4] - As of July 31, 2025, the top ten weighted stocks in the Sci-Tech Chip Index accounted for 57.59% of the index, including companies like Cambricon, SMIC, and Haiguang Information [4]

Core Viewpoint - Xiaomi's self-developed SoC chip "Xuanjie O1" is set to be officially released in late May, marking a significant milestone in the company's decade-long journey in chip development and a pivotal moment in the global semiconductor industry [1][9]. Group 1: Development Timeline - Xiaomi's chip development began in October 2014 with the establishment of Pinecone Electronics, leading to the release of the first self-developed SoC, Surge S1, in February 2017 [3][5]. - Over the years, Xiaomi has built a research team of over 1,000 people and released various chips, including Surge C1, P1, and G1, accumulating experience in chip design [3][5]. Group 2: Technical Features of Xuanjie O1 - Xuanjie O1 utilizes TSMC's 4nm process and features a "1+3+4" tri-cluster architecture, with performance comparable to Qualcomm's Snapdragon 8 Gen2 [7]. - The chip integrates UWB technology for smart interactions with Xiaomi's automotive products, indicating a strategic move towards a comprehensive ecosystem [7][8]. - Key technological innovations include a dual-brain architecture for enhanced AI performance, a RISC-V open instruction set to bypass ARM patents, and silicon photonic interconnect technology for improved memory bandwidth [8]. Group 3: Strategic Implications - The launch of Xuanjie O1 is seen as a critical step in Xiaomi's ecosystem strategy, positioning the company as a unique player with capabilities in self-developed mobile chips, automotive brands, and a full ecosystem [8][9]. - Xiaomi's dual supply chain strategy aims to mitigate geopolitical risks while planning to transition to domestic manufacturing by 2026, despite potential performance trade-offs [9]. Group 4: Industry Context and Challenges - The release of Xuanjie O1 occurs amid a global chip war, with increasing restrictions on semiconductor technology, highlighting the importance of self-sufficiency in China's chip industry [9][10]. - Despite the progress, challenges remain, including the need for significant investment in chip development and the cultivation of market trust in domestic chips [9][10].