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Recently, there have been reports that the U.S. government is considering approving NVIDIA’s sale of H200 artificial intelligence chips to China, potentially easing the two-year-long ban on high-end chips to China.The shift from strict bans to potential easing reflects an unstoppable trend in the rise of the domestic chip industry. However, the fluctuations in the market will also be amplified by the repeated nature of the bans.In the dual drive of technological competition and AI transformation, the chip industry faces both “crisis” and “opportunity”. How should investors decide?
Heavy investment or steady layout?
In fact, the H200 chip released two years ago is no longer NVIDIA’s most advanced chip. Previously, the U.S. government only allowed the sale of a “crippled version” of the H20 chip. Due to the H20’s limited performance and poor cost-effectiveness, coupled with supply chain uncertainties, Chinese customers have accelerated their shift towards domestic solutions.
This situation, where bans are imposed while “crippled versions” are allowed, has instead allowed NVIDIA to cede its original dominance in the Chinese AI chip market to Chinese companies.Without the bans, domestic companies would struggle to find opportunities to perform; if the bans are too strict, the temporary domestic demand cannot be met.This coexistence of “repeated bans” and “industrial breakthroughs” has created a rare “window period”.
Beyond the H200, NVIDIA has higher-end models like the B200 and B300. Although NVIDIA’s high-end chips have significant advantages, the U.S. has not only banned the H200 but also the B200/B300, which has provided stronger motivation and clearer goals for China to develop independently in high-end fields.
The B300’s memory has been upgraded from 8-Hi (8-layer stacking) to 12-Hi HBM3E, with each GPU’s HBM capacity increasing to 288GB, and its floating-point performance being 50% higher than that of the B200.In the competition for large models, the differences in performance will further amplify the differences in gross margins, with only the most capable and differentiated models able to command significant premiums.It is reported that some leading models have gross margins exceeding 70%, while lagging models have gross margins below 20%.
Leading in performance could mean leading in gross margins by five or ten steps! Stock market performance will also vary greatly.
Not only is there a competition in the performance of individual chips, but the global semiconductor industry chain is also being profoundly reshaped by the demand for high-end computing power. Currently, the global semiconductor industry chain is adjusting production lines to compete for high-end computing power demand. The three major memory giants, Samsung, SK Hynix, and Micron, are shifting their production capacity towards HBM and DDR5 high-end products, leading to supply shortages, while traditional products like DDR4 are in tight supply.
According to Morgan Stanley, NAND spot prices have risen by about 50% in the past six months, while DRAM spot prices have skyrocketed by 300%, far exceeding the price increases during the long cycle of memory from 2016 to 2018. TrendForce also stated that by the fourth quarter of 2025, DRAM contract prices are expected to rise over 75% compared to the same period last year.
This round of chip cycle upturn, combined with breakthroughs in domestic technology, provides an excellent opportunity for Chinese chip companies to achieve both volume and price growth, which has been fully reflected in the capital market.
Since the beginning of the year, the Shanghai Stock Exchange Science and Technology Innovation Board chip index has shown a remarkable upward performance. According to Wind data, from the beginning of 2025 to now, the Science and Technology Innovation chip index has risen by 55.9%, the Science and Technology Innovation 50 index has risen by 37.6%, and the Shanghai Composite Index has risen by 19.1%, with the Science and Technology Innovation chip index significantly outperforming both the Science and Technology Innovation 50 and the broader market index.
Recently, Morgan Stanley predicted that this year, tech giants will invest $400 billion in AI infrastructure. This will create massive demand for the latest storage chips for AI. Estimates show that a single AI server requires eight times the DRAM of a regular server and three times the NAND. This is just the demand for memory and storage chips.
As one of the two most important battlegrounds for global AI development, China itself has an extremely large and still rapidly growing market demand. This fertile ground undoubtedly provides excellent conditions for the emergence of a new generation of chip giants. However, a larger market also means greater risks.
In the face of this epic industrial opportunity and the accompanying high volatility, ordinary investors who wish to share in the dividends of the rise of “Chinese chips” face significant risks in heavily betting on a single company. Using index-based tools for a steady layout is actually a more manageable way to seize opportunities.
Recently, 16 public fund products focusing on hard technology have been approved, providing investors with a convenient way to capture the overall opportunities during the golden development period of the Chinese chip industry through diversified investments. Among them, E Fund has three products: E Fund Shanghai Stock Exchange Science and Technology Innovation Board Chip ETF, E Fund Shanghai Stock Exchange Science and Technology Innovation Board Chip Design Theme ETF, and the E Fund CSI Innovation and Entrepreneurship Artificial Intelligence ETF currently being issued.
Focus on the entire forest, not just a single tree
Recently, the release of Huawei’s new flagship Mate80 series smartphones has drawn attention due to numerous technological breakthroughs. The technological advancements of the Mate80 series are supported by the collaboration of companies across various segments of the chip and semiconductor supply chain.
This vast and complex supply chain includes leading companies with high technical barriers in their respective segments, as well as suppliers that achieve high performance elasticity through excellent service and diversified layouts.Focusing only on one or two companies can easily lead to missing the bigger picture and incurring unnecessary individual stock risks.
In fact, the chip industry exhibits significant cyclical volatility, and individual stock investments face the dilemma of “high returns and high risks”. The depth and breadth of the industry chain mean that even industry leaders may face challenges due to bottlenecks in certain segments or changes in market demand.
Behind the rise of the Chinese chip industry is a rich soil built by multiple important factors: China is establishing an independent AI ecosystem, with general large models blooming across vertical application layers; policy support continues to strengthen, with the “14th Five-Year Plan” clearly stating that the chip industry will focus on breaking manufacturing bottlenecks, advancing integrated circuit field breakthroughs across the entire chain, and striving for decisive breakthroughs. On the consumer side, China has the largest and most diverse chip demand market in the world. More importantly, the vast technical consumer group cultivated by 1.4 billion people provides rapid trial and error and iteration space for innovation.
This combination of “full industry chain collaboration + full market coverage” is the most unique advantage of the Chinese chip industry—it does not rely on the fate of any single company but is rooted in the resilience and vitality of the entire ecosystem.
In such a forest, there will be many opportunities to grow into towering trees.
In fact, the same applies to the U.S. stock market; NVIDIA is not the only big tree. Training top large models does not necessarily require NVIDIA GPUs; Meta and Anthropic are considering procuring Google’s TPU chips. According to estimates from Guosen Securities, Google’s TPU v6e is already close to NVIDIA’s Blackwell in terms of cost per unit of computing power (TOPS/dollar).
For domestic industries and markets, it is essential to seek opportunities amid fluctuations and achieve breakthroughs under pressure.
For Huawei’s Mate80 series flagship smartphones, perhaps what deserves more praise is not the performance improvement but the cost reduction. In 2025, when storage chips and flash memory are collectively increasing in price, the Mate80 series can achieve a starting price reduction of 800 and 500 yuan compared to the previous generation, which is not just a pricing strategy but is backed by self-developed technology and supply chain integration that brings cost reductions—such as optimizing the yield of Kirin chips and reducing licensing costs for HarmonyOS.
Breakthroughs by leading companies also positively impact the entire industry chain, bringing clear growth opportunities to various segments such as chips, materials, communications, and software, continuously activating the innovative vitality of the industry chain.
The U.S., as the forefront of AI technology, continues to see its giant companies invest heavily, creating enormous demand for chips. In China, both at the national level and from private capital, there is also significant investment in the AI field.
At the 2025 Cloud Habitat Conference, Alibaba Group CEO Wu Yongming stated that not only is the originally planned investment of 380 billion yuan over the next three years actively progressing, but additional investments will also be made to build cloud computing and AI infrastructure. He predicts that by 2032, the energy consumption scale of Alibaba Cloud’s global data centers will increase tenfold, which means a geometric growth in computing power investment. The substantial increase in AI computing power infrastructure investment by leading tech companies will also drive demand in upstream hardware industries such as servers, chips, optical modules, data center IDC, and energy-saving temperature control, which will strengthen market expectations for the long-term growth potential of AI computing power and chips.
This means that the local AI development in China will also bring enormous demand for chips, providing vast market space for domestic chip companies.Even in the face of advanced process constraints, many companies in the market are innovating with designs such as 3D storage integration, silicon photonic module integration, and Chiplet multi-chip integration, gradually breaking through, optimizing, and iterating under limited conditions.
In such a large market with a long chip industry chain and rapid technological iteration, selecting individual stocks is extremely challenging. Therefore, adopting a more macro “forest perspective” for layout is a wise move to navigate cycles and avoid risks.
In terms of allocation philosophy, investors may consider using E Fund Shanghai Stock Exchange Science and Technology Innovation Board Chip Index Fund (A/C: 020670/020671) to precisely capture the explosive growth of the chip industry; at the same time, supplementing with A500 ETF E Fund (159361) and other broad-based products can enhance the overall robustness of the investment portfolio while enjoying the benefits of technological growth. For long-term investors with retirement investment needs, they can also pay attention to A500 ETF E Fund’s corresponding linked fund Y share (022930), which offers a more advantageous fee structure to share in the dividends of China’s economic development over the long term.
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