Yesterday the China Semiconductor Industry Association issued a notice regarding the “Rules for the Recognition of the ‘Place of Origin’ of Semiconductor Products,” which suggests: “For ‘integrated circuits,’ whether packaged or unpackaged, the place of origin declared during import customs clearance should be based on the location of the ‘wafer fabrication factory.'” 
This news has had a positive impact on the semiconductor sector, with a rapid increase in semiconductor stocks yesterday, particularly in analog chips and specialty process manufacturing companies. Today, we will briefly interpret the logic behind this: 1. Preventing short-term chaos in the IT supply chain due to counter-tariffs from the U.S. For instance, chip design companies like Qualcomm, Apple, NVIDIA, and AMD have a significant domestic demand for their digital chips, which cannot be easily replaced in the short term. Therefore, recognizing the wafer fabrication location as the place of origin can mitigate this risk. Most of their chips are manufactured by TSMC, which is located in Taiwan, China. Thus, they will not be affected by the counter-tariffs against the U.S., reducing the impact on the IT industry. 2. Providing a warning to chip manufacturers, especially TSMC. Currently, the U.S. is preparing to shift all high-end chip production from TSMC to domestic production. This recognition of the wafer fabrication location will inevitably prompt TSMC to consider retaining a significant portion of its production capacity outside of the U.S. 3. For companies like Texas Instruments, Intel, ON Semiconductor, and Micron, which have wafer fabrication locations in the U.S., this will have a negative impact, serving as a countermeasure and leading to a complete domestic replacement in these chip sectors. This is also a significant factor in the surge of A-share stocks in RF front-end chips, signal chain chips, power management chips, and other analog chips yesterday. Of course, this is also a positive development for specialty process manufacturing wafer fabs. Overall, the path to domestic chip replacement continues, but in the fields of logic chips and micro-integrated circuits, due to high process requirements, it may still take some time for a transition.