On June 3rd, the semiconductor industry chain surged again, with multiple stocks in upstream equipment and materials exploding. The Semiconductor Equipment ETF China Merchants (561980) rose 4.38% during trading, Kangqiang Electronics and Lian Micro hit the daily limit, Cambrian increased by over 8%, Kema Technology, Shengmei Shanghai, and Shengong Co., Ltd. rose by over 10%, while Changchuan Technology, Zhongwei Company, and Northern Huachuang saw multiple stocks rally.

Data shows that this ETF tracks the China Securities Semiconductor Industry Index, which has risen over 53% year-to-date as of the latest update, with a cumulative increase of over 385% since 2020 and a nearly one-year increase of 141%. It ranks first among similar indices in multiple stages, including innovative chips and semiconductor materials and equipment.

From the perspective of the industry chain, during the ongoing roadshow "The Tao τ Law Breaks the Core Situation! How to View the Semiconductor Market?", Yan Fan, Chief Analyst of the Electronic Industry at China Merchants Securities, pointed out that the Tao τ Law reconstructs industrial value, with advanced packaging, foundry, and equipment materials expected to benefit deeply.

Specifically, Huawei's latest release of the Tao τ Law replaces the traditional "geometric scaling" with "time scaling," compressing signal delay across four levels: devices, circuits, chips, and systems through technologies such as logical folding. This achieves equivalent advanced process performance on mature processes, providing a sustainable evolution path for domestic chips that does not rely on EUV. Huawei has already mass-produced 381 types of chips based on this, with transistor density expected to reach the equivalent of 1.4 nanometers by 2031.

In the implementation process, three major links in the chip industry chain are expected to benefit deterministically: first, advanced packaging, where logical folding is deeply bound with 2.5D/3D packaging, Chiplet, and hybrid bonding, elevating the packaging and testing segment from the end to the core of value, with domestic packaging and testing leaders directly benefiting from order explosions. Second, wafer foundry, where the Tao τ Law allows 7nm and 14nm mature processes to rival the performance of 5nm and 3nm, significantly enhancing the strategic value of mature and sub-advanced processes, with domestic foundries' capacity expected to gradually expand. Finally, semiconductor equipment and materials, where the demand for etching, thin film deposition, CMP, and other equipment is significantly increased due to the 3D stacking architecture of logical folding, while the demand for hybrid bonding equipment in back-end processes is also further boosted, allowing domestic equipment manufacturers to continue benefiting.

In summary, the Tao Law essentially reconstructs the value distribution system of the semiconductor industry, shifting the focus of industrial value from solely EUV lithography and the most advanced processes to a comprehensive spread across advanced packaging, mature process foundry, equipment, and EDA in domestic advantageous tracks. The aforementioned three main lines are expected to benefit deeply.

According to data from the China Securities Index official website, the Semiconductor Equipment ETF China Merchants (561980) tracks the China Securities Semiconductor Industry, with 80% of its holdings in equipment and materials and 20% in CPU/GPU and advanced manufacturing: the "Changxin Storage" concept accounts for as much as 53%, Northern Huachuang + Zhongwei Company together account for 28%, Cambrian + Haiguang Information together account for 15%, and SMIC accounts for 6%, with the top ten concentration reaching as high as 77%, expected to benefit simultaneously from the Tao Law, dual storage expansion, and the domestic substitution process