Understanding the Market | Hua Hong Semiconductor rose nearly 8% in early trading, reaching a new high. Recently announced a restructuring with Huali Microelectronics. Goldman Sachs stated that the company has negotiated price increases with clients
HUA HONG SEMI rose nearly 8% in the morning session, reaching a new high of HKD 71.4, currently reported at HKD 69.9, with a trading volume of HKD 1.641 billion. The company recently announced a restructuring with Huali Microelectronics to enhance its 12-inch wafer foundry capacity. Goldman Sachs pointed out that although the average product price is declining in 2023, it is expected that the capacity utilization rate will exceed 100% from the third quarter of 2024 to the second quarter of 2025. HUA HONG has negotiated price increases with customers, and prices are expected to gradually rise in the future
According to Zhitong Finance APP, Hua Hong Semiconductor (01347) rose nearly 8% in early trading, reaching a new high of HKD 71.4. As of the time of publication, it is up 5.51%, trading at HKD 69.9, with a transaction volume of HKD 1.641 billion.
In terms of news, Hua Hong recently announced a restructuring with Huali Micro to resolve the industry competition issues related to its IPO commitments. Huali Micro's fifth factory mainly provides 12-inch integrated circuit wafer foundry services, with a capacity of 38,000 wafers per month, offering complete technical solutions for terminal application fields such as communications and consumer electronics, and both companies possess 65/55nm and 40nm process foundry technologies. This restructuring will further enhance the company's 12-inch wafer foundry capacity, and the complementary advantages of both parties' process platforms will jointly build a foundry and supporting services that cover a wider range of application scenarios and more complete technical specifications.
Goldman Sachs recently released a research report stating that due to the increase in global mature process capacity and the slowdown in terminal market growth, the average selling price of Hua Hong's products has been on a downward trend since the first quarter of 2023. However, supported by a capacity utilization rate exceeding 100% from the third quarter of 2024 to the second quarter of 2025, Hua Hong has begun price negotiations with customers, which is expected to be reflected in the performance of the third quarter of 2025. Although the average price increase in the short term will not be significant, the bank believes this is a positive signal of supply and demand improvement. As the main terminal markets have completed inventory adjustments, prices are expected to show a gradual and sustainable upward trend in the future
