Investment Rating - The report maintains an "Outperform" rating for the electronic industry [5][9]. Core Views - The ongoing US-China tariff disputes are intensifying the urgency for self-sufficiency in the electronic sector. Despite a slight decline in the overall electronic market, certain sub-sectors like components have shown resilience with a 2.21% increase [1][10]. - The semiconductor industry is facing challenges due to export restrictions on EDA tools, emphasizing the strategic importance of domestic production capabilities [2]. - The NAND Flash market is expected to recover as inventory levels normalize, with a projected 10% revenue growth for major brands in Q2 2025 [3]. - Nvidia's quarterly revenue reached a record high, driven by strong demand for AI infrastructure, indicating a robust growth trajectory for the AI-related electronic components [4]. Summary by Sections Market Trends - The Shanghai Composite Index fell by 0.03%, while the electronic sector declined by 0.59%. The semiconductor sub-sector faced concerns over sustainability due to recent performance issues from SMIC [1][10]. Semiconductor Industry - The report highlights the impact of US export restrictions on EDA tools, which reinforces the need for a fully domestic semiconductor supply chain. Companies like SMIC and Huahong Semiconductor are recommended for their potential in this area [2]. Storage Market - NAND Flash prices are expected to rebound in Q2 2025 after a significant drop in Q1 2025, with a forecasted 10% revenue increase for major brands as demand stabilizes [3]. AI and Infrastructure - Nvidia's data center revenue surged to $39.112 billion, reflecting a 73.3% year-over-year increase, driven by the demand for AI infrastructure. The report suggests continued investment in companies involved in AI technologies [4]. Key Investment Recommendations - The report recommends focusing on companies with strong domestic capabilities in the semiconductor and storage sectors, including names like SMIC, Jingwei, and others [2][3][9].

ETF Industry News - The three major indices collectively rose, with the Shanghai Composite Index increasing by 0.42%, the Shenzhen Component Index by 0.87%, and the ChiNext Index by 1.11. Multiple electronic sector ETFs saw gains, including the CICC Technology Pioneer ETF (560990.SH) which rose over 6%, and the 5G Communication ETF (515050.SH) which increased by 2.26% [1][3] Fund Flows - In May, over 20 billion yuan flowed into technology innovation ETFs, particularly in the semiconductor and high-end manufacturing sectors. The top three ETFs by net inflow were the Huaxia Science and Technology 50 ETF with 4.93 billion yuan, the Guolian An Semiconductor ETF with 2.36 billion yuan, and the Harvest Science and Technology Chip ETF with 1.87 billion yuan [2] Market Performance - The overall performance of ETFs showed that cross-border ETFs had the best average return at 1.07%, while money market ETFs had the worst performance with an average return of 0.00% [8] Sector Performance - The beauty care, comprehensive, and textile and apparel sectors ranked highest in daily performance, with daily increases of 2.63%, 2.53%, and 2.41% respectively. Conversely, transportation, national defense, and public utilities sectors lagged behind with declines of -0.58%, -0.24%, and -0.12% [5] Top Performing ETFs - The top three performing stock ETFs today were the CICC Technology Pioneer ETF (560990.SH) with a return of 6.40%, the Innovative Drug ETF by Huatai-PB (517120.SH) with 2.87%, and the Innovative Drug ETF by Shanghai-Hong Kong (159622.SZ) with 2.74% [10][11]