--- title: "Southern Fund \"Above Value\" Zheng Xiaoxi: The current upward cycle of semiconductors is expected to surpass historical levels" type: "News" locale: "en" url: "https://longbridge.com/en/news/286279069.md" description: "Zheng Xiaoxi from Southern Fund stated that the semiconductor industry, driven by AI technology, is expected to surpass historical levels in the upcoming upward cycle. According to data from SIA and WSTS, global semiconductor sales are projected to reach USD 791.7 billion in 2025 and exceed USD 1 trillion in 2026. Zheng Xiaoxi pointed out that AI, as a foundational technology, will permeate various industries, driving growth in semiconductor demand. She also emphasized that domestic AI has not yet entered a bubble stage, and 2026 will be the inaugural year for investments in domestic AI computing infrastructure" datetime: "2026-05-13T14:07:42.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/286279069.md) - [en](https://longbridge.com/en/news/286279069.md) - [zh-HK](https://longbridge.com/zh-HK/news/286279069.md) --- # Southern Fund "Above Value" Zheng Xiaoxi: The current upward cycle of semiconductors is expected to surpass historical levels In today's rapidly developing AI landscape, the semiconductor industry, as the foundational base for AI computing power and the core cornerstone of the digital economy, presents key issues for investors to address: how to uncover investment opportunities, how to accurately view long-term logic, and how to grasp future main lines. Recently, Southern Fund's "Above Value" themed column invited Zheng Xiaoxi, a fund manager of Southern Information Innovation Mixed Fund, which focuses on semiconductors, to engage in a professional dialogue with technology blogger "Dong Guidance Research" Dong Shimin, deeply interpreting the "changes" and "constants" in the semiconductor industry by 2026. Having experienced three rounds of bull and bear cycles and delving into the semiconductor sector for many years, Zheng Xiaoxi has consistently adhered to investment trends in the industry, creating alpha returns through research. Relying on a macro-meso-micro three-dimensional research framework, she clearly outlines the development context and investment logic of the semiconductor industry. The length and magnitude of this upward cycle are expected to surpass historical levels. According to data from the Semiconductor Industry Association (SIA) and the World Semiconductor Trade Statistics (WSTS), global semiconductor sales are expected to reach $791.7 billion in 2025, a year-on-year increase of 25.6%; sales are projected to exceed $1 trillion in 2026, with a year-on-year growth rate of about 26%, maintaining a high growth trend for three consecutive years. Zheng Xiaoxi pointed out that, from a cyclical perspective, the global semiconductor industry has experienced a complete cycle of fluctuations approximately every 3-5 years over the past few decades, typically characterized by 2.5 years of upward movement and 1.5 years of decline. However, this cycle, which began its upward movement in 2024, is expected to exceed historical levels in length and magnitude due to factors such as AI technological innovation and accelerated domestic substitution. "The core driving force for the semiconductor industry's continued upward cycle is that AI, as a foundational technology, is fully penetrating various industries, significantly increasing the 'chip content' across the entire industry, leading to an unprecedented demand pull for semiconductor chips in historical cycles," she further stated. Regarding the market's heated discussion on the "AI bubble theory," Zheng Xiaoxi clearly responded: domestic AI is far from reaching a bubble stage. The years 2023-2025 are a period of R&D investment for advanced semiconductor processes in China, and from 2026 onwards, AI infrastructure such as semiconductor chips will enter mass production and scaling, officially opening the curtain on domestic AI investment. The year 2026 will be the inaugural year for investment in domestic AI computing power infrastructure, with domestic capital expenditure expected to be concentrated and released, marked by the expansion of leading storage companies, and subsequent acceleration of AI investments is anticipated. She emphasized that semiconductors are the core infrastructure of the technology industry, covering dozens of downstream fields such as home appliances, automobiles, and humanoid robots, with varying degrees of prosperity across different terminal sectors. Even if there are periodic fluctuations in the AI sector, automotive chips and special equipment chips are emerging from inventory bottoms, with ongoing structural opportunities on the left side. Firmly optimistic about the main line of semiconductor self-control. Standing at the critical juncture of 2026, Zheng Xiaoxi is firmly optimistic about the main line of semiconductor self-control, with a clear and distinct core logic: first, the global semiconductor industry cycle is on the rise, driven by sustained high demand from AI; second, downstream applications are blossoming in multiple areas, continuously driving upstream infrastructure investment through AI Agents, humanoid robots, and edge AI; third, domestic storage chip prices are rising, and the expansion of leading storage companies has become an important event driver for the industry, with optimistic upward capital expenditure Currently, domestic semiconductor localization has moved from the design end to the midstream and upstream deep water areas such as equipment, components, and materials. The latest statistics show that by early 2026, the localization rate of domestic semiconductor equipment has risen from 15% in 2024 to 35%, with the share of etching equipment and thin film deposition equipment exceeding 40%, and the replacement of mature processes accelerating. (Data source: China Report Hall) "In the chip design field, the localization rates for mid-to-low-end and higher-end products are already at high levels, with impressive export growth; the segments of equipment and materials are transitioning from low localization rates to high localization rates; core bottleneck areas such as photolithography machines are expected to achieve key breakthroughs during the 14th Five-Year Plan period," said Zheng Xiaoxi. She noted that the competitive landscape varies significantly across different segments: the semiconductor equipment industry is stable, with leading companies consistently at the forefront; the chip design field is vibrant with innovation, and new players in domestic computing power chips are continuously emerging, releasing ongoing growth opportunities. Regarding the balance between valuation and growth in semiconductor investments, Zheng Xiaoxi believes that valuation is akin to a "treasure chest," containing various valuation "tools" such as PE, PS, net profit conversion from R&D investment, DCF, etc., suitable for different industry life cycles, company characteristics, and market environments, rather than a single standard. She also stated that current semiconductor companies are in a concentrated release period of R&D investment, and traditional valuation methods may appear high; however, considering the long-term growth potential and the benefits of domestic substitution, high-quality targets still hold allocation value. As a technology growth style fund manager, she places greater emphasis on the core team, technological barriers, and growth potential of companies, downplaying the weight of short-term traditional valuation, and accompanying excellent companies through cycles with a long-term perspective to share in the industry's growth dividends. Overall, as a national strategic asset, semiconductors possess both strategic value and growth attributes. Under the dual resonance of AI innovation and domestic substitution, the long-term opportunities in the semiconductor industry are clear for 2026 ### Related Stocks - [588200.CN](https://longbridge.com/en/quote/588200.CN.md) - [PSI.US](https://longbridge.com/en/quote/PSI.US.md) - [ARTY.US](https://longbridge.com/en/quote/ARTY.US.md) - [562820.CN](https://longbridge.com/en/quote/562820.CN.md) - [515070.CN](https://longbridge.com/en/quote/515070.CN.md) - [SOXL.US](https://longbridge.com/en/quote/SOXL.US.md) - [FTXL.US](https://longbridge.com/en/quote/FTXL.US.md) - [561980.CN](https://longbridge.com/en/quote/561980.CN.md) - [SOXX.US](https://longbridge.com/en/quote/SOXX.US.md) - [SMH.US](https://longbridge.com/en/quote/SMH.US.md) - [588780.CN](https://longbridge.com/en/quote/588780.CN.md) - [SOXQ.US](https://longbridge.com/en/quote/SOXQ.US.md) - [588170.CN](https://longbridge.com/en/quote/588170.CN.md) - [159325.CN](https://longbridge.com/en/quote/159325.CN.md) - [159516.CN](https://longbridge.com/en/quote/159516.CN.md) - [ARKK.US](https://longbridge.com/en/quote/ARKK.US.md) - [159995.CN](https://longbridge.com/en/quote/159995.CN.md) - [560780.CN](https://longbridge.com/en/quote/560780.CN.md) - [512760.CN](https://longbridge.com/en/quote/512760.CN.md) - [159546.CN](https://longbridge.com/en/quote/159546.CN.md) - [AGIX.US](https://longbridge.com/en/quote/AGIX.US.md) - [512480.CN](https://longbridge.com/en/quote/512480.CN.md) - [AIQ.US](https://longbridge.com/en/quote/AIQ.US.md) - [562590.CN](https://longbridge.com/en/quote/562590.CN.md) - [159558.CN](https://longbridge.com/en/quote/159558.CN.md) - [XSD.US](https://longbridge.com/en/quote/XSD.US.md) ## Related News & Research - [Blue Trust Inc. 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