Understanding the Market | Chip Stocks Lead the Decline, NVIDIA to Resume Sales of H20 Chips to China, Wafer Foundries' Q2 Performance May Be Under Pressure
Chip stocks generally fell, with Hongguang Semiconductor down 3.51%, Beike down 2.87%, SMIC down 2.37%, and Hua Hong Semiconductor down 1.28%. NVIDIA announced it will resume sales of the H20 chip in China and launch a new compatible GPU. SMIC expects Q2 performance to be affected, guiding a decline of 4%-6%. Hua Hong expects Q2 revenue of USD 550-570 million, a year-on-year increase of 8.3%
According to Zhitong Finance APP, chip stocks are among the biggest decliners. As of the time of publication, Hongguang Semiconductor (06908) fell by 3.51%, trading at HKD 0.55; Baker Hughes (02149) dropped by 2.87%, trading at HKD 55.9; SMIC (00981) decreased by 2.37%, trading at HKD 45.35; Hua Hong Semiconductor (01347) fell by 1.28%, trading at HKD 34.75.
In terms of news, on July 15, NVIDIA announced on its official website that the company will resume sales of the H20 in China and announced the launch of a brand new and fully compatible GPU for the Chinese market. NVIDIA founder and CEO Jensen Huang stated that NVIDIA is submitting an application to resell the H20 GPU. The U.S. government has assured NVIDIA that it will grant the license, and NVIDIA hopes to start deliveries as soon as possible. At the same time, Huang announced the launch of a brand new and fully compatible NVIDIA RTX PRO GPU.
It is worth noting that SMIC previously guided a 4%-6% quarter-over-quarter decline for Q2, mainly due to unexpected issues in its factory affecting production lines, as well as equipment and process improvements impacting yield rates, which affected SMIC's ASP performance and subsequently its Q2 guidance. Hua Hong guided Q2 2025 revenue of USD 550-570 million, with a midpoint of USD 560 million, representing a year-on-year increase of 8.3% and a quarter-over-quarter increase of 3.5%. Looking ahead, as the company's revenue further increases, it is expected to dilute depreciation pressure, coupled with a potential recovery in prices, further enhancing profitability
