China Stocks Fall on Semiconductor Rout

2026-07-28 02:02 By Czyrill Jean Coloma 1 min. read

The Shanghai Composite dropped 0.6% to 3,836 on Tuesday, while the Shenzhen Component tumbled 2.2% to 13,841, with both benchmarks reversing gains from the previous session as renewed selling pressure swept through semiconductor stocks.

The sector came under pressure as growing investor concerns over whether massive AI investments will generate sufficient returns weighed on chipmakers.

The selloff came after the blockbuster debut of memory-chip maker CXMT, whose IPO had fueled a sharp rally in semiconductor shares amid strong retail demand, attractive valuations, and continued state-backed support for equity markets.

Among the biggest decliners were Cambricon Technologies (-2.7%), SMIC (-1.5%), GigaDevice Semiconductor (-7.5%), Zhongji Innolight (-7.1%), and Eoptolink Technology (-6.7%).

Investors are now turning their attention to the Politburo meeting later this week, where policymakers are widely expected to outline the economic policy agenda for the second half of the year.



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China Stocks Fall on Semiconductor Rout
The Shanghai Composite dropped 0.6% to 3,836 on Tuesday, while the Shenzhen Component tumbled 2.2% to 13,841, with both benchmarks reversing gains from the previous session as renewed selling pressure swept through semiconductor stocks. The sector came under pressure as growing investor concerns over whether massive AI investments will generate sufficient returns weighed on chipmakers. The selloff came after the blockbuster debut of memory-chip maker CXMT, whose IPO had fueled a sharp rally in semiconductor shares amid strong retail demand, attractive valuations, and continued state-backed support for equity markets. Among the biggest decliners were Cambricon Technologies (-2.7%), SMIC (-1.5%), GigaDevice Semiconductor (-7.5%), Zhongji Innolight (-7.1%), and Eoptolink Technology (-6.7%). Investors are now turning their attention to the Politburo meeting later this week, where policymakers are widely expected to outline the economic policy agenda for the second half of the year.
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The Shanghai Composite gained 1.15% to close at 3,858.2 on Monday, while the Shenzhen Component climbed 2.72% to 14,148.7, as investors brushed aside concerns that memory-chip maker CXMT's blockbuster listing would drain market liquidity. CXMT shares surged more than 500% from their IPO price of CNY 8.66, making the company the most valuable stock on mainland exchanges. The stellar debut underscored strong investor appetite for Chinese semiconductor stocks, fueled by expectations that the sector will benefit from Beijing's push for technological self-sufficiency. Meanwhile, China's industrial profits rose 18.7% year-on-year to CNY 3.95 trillion in the first half of 2026, slightly slower than the 18.8% increase recorded in January–May. Technology and chip-related stocks advanced, with Cambricon Technologies (1.31%), Shengyi Technology (6.13%), Zhongji Innolight (2.91%), Eoptolink Technology (3.15%), and NAURA Technology (1.72%) among the notable gainers.
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