Core Insights - The Shanghai Stock Exchange's Sci-Tech Innovation Board semiconductor materials and equipment index has risen by 2.76% as of August 18, with notable increases in constituent stocks such as Huahai Chengke (up 8.03%), Tianyue Advanced (up 7.10%), and Aisen Co. (up 5.98%) [1] - The Sci-Tech Semiconductor ETF (588170) has also seen a rise of 2.64%, indicating active market trading with a turnover of 75.84 million yuan and a turnover rate of 18.06% [1] - According to China International Capital Corporation (CICC), the demand for AI hardware is expected to grow significantly due to the increasing capabilities of large models and the expansion of AI inference computing power [1] Industry Trends - There is a confirmed increase in domestic and international demand for computing power, which is expected to drive growth in AI hardware [1] - The importance of networks in AI Data Center (AIDC) applications is anticipated to rise [1] - The acceleration of AI applications such as Agents is expected to contribute to market growth [1] Investment Opportunities - The Sci-Tech Semiconductor ETF (588170) tracks the semiconductor materials and equipment index, focusing on companies in semiconductor equipment (59%) and materials (25%) sectors [1] - The semiconductor equipment and materials industry is identified as a key area for domestic substitution, benefiting from low domestic replacement rates and high potential for domestic alternatives [1] - The sector is poised to gain from the expansion of semiconductor demand driven by the AI revolution, technology restructuring, and advancements in lithography technology [1]

Core Viewpoint - The semiconductor materials and equipment sector in China's Sci-Tech Innovation Board is experiencing significant growth, driven by increasing demand for computing power and advancements in artificial intelligence [1][2]. Group 1: Market Performance - As of August 18, 2025, the Sci-Tech Innovation Board semiconductor materials and equipment theme index rose by 2.55%, with notable increases in constituent stocks such as Huahai Chengke (+8.49%), Tianyue Advanced (+5.11%), and Hushi Silicon Industry (+5.00%) [1]. - The Sci-Tech Semiconductor ETF (588170) also increased by 2.55%, reaching a new high for the year at 1.13 yuan [1]. Group 2: Computing Power Growth - According to the Ministry of Industry and Information Technology, China's computing power reached 180 EFLOPS by the end of 2022, ranking second globally, and is projected to grow to 300 EFLOPS by 2025 [1]. - The proportion of intelligent computing power within the total computing power has increased from 3% in 2016 to 25.4% by June 2023, with expectations to reach 35% by 2025 [1]. Group 3: Investment in Intelligent Computing Centers - Tianfeng Securities reports that the domestic intelligent computing center market is experiencing rapid growth, with a market size of 87.9 billion yuan in 2023, reflecting over 90% year-on-year growth [1]. - The demand for computing power is shifting towards inference as AI large models are increasingly implemented in commercial scenarios [1]. Group 4: Semiconductor Sector Characteristics - The Sci-Tech Semiconductor ETF (588170) tracks the semiconductor materials and equipment theme index, comprising 59% semiconductor equipment and 25% semiconductor materials, highlighting the importance of domestic substitution in these sectors [2]. - The semiconductor equipment and materials industry is characterized by low domestic substitution rates and high potential for domestic replacement, benefiting from the expansion of semiconductor demand driven by the AI revolution and technological advancements [2].