Citi published a report expecting the uptrend in pricing for Chinese analog chips to continue because (1) price hikes by international analog chip suppliers in April and July are accelerating localization of analog chip supply, and (2) domestic demand for analog chips from networking/computing applications is increasing.

Given that most Chinese analog chip suppliers are fabless companies, supply growth should remain limited. Chinese OSAT pricing may continue to rise in 2H26 due to tight capacity utilization. Power discrete devices may also see price increases, although Chinese integrated device manufacturers (IDM) could also add new capacity.

Citi favored (1) LQKJ (688008.SH) +29.660 (+15.615%) A shares, despite US investors preferring the H shares of MONTAGE TECH (06809.HK) +45.000 (+17.045%) Short selling $71.62M; Ratio 6.069% , in light of its solid fundamentals, with revenue and profit reaching record highs in 2Q26, as well as its product pipeline. Valuation also appears attractive following the recent South Korean antitrust investigation. (2) ASMPT (00522.HK) +10.500 (+6.514%) Short selling $28.12M; Ratio 6.195% , as the broker expected a backend capex supercycle to drive upside in thermal compression bonding (TCB) and support a rebound in semiconductor capital equipment stocks after the IPO of CXMT. (3) Chroma ATE (2360.TW), citing multiple AI-driven growth catalysts including system-level testing, power testers, metrology, and photonics/CPO. Despite recent profit-taking in the market, fundamentals remain intact. (4) SG (300661.SZ) +12.040 (+12.284%) / SG MICRO (03661.HK) +5.250 (+5.483%) , as Citi forecast the pricing uptrend in 2H26 to drive upside in revenue and earnings. Chinese analog chips may see their first price hikes since 2022.
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