China IT Industry Weekly: AI Hardware Wave and Domestic Substitution Accelerate, Focus on Semiconductor and Supercomputing Supply Chains

Bottom Line

This week, China's IT industry shows strong AI hardware-driven characteristics, with supercomputers returning to the top, chip companies' IPOs gaining momentum, and electronics industry profits doubling—clear signals pointing to accelerated domestic substitution and AI infrastructure construction. It is recommended that investors overweight the semiconductor, high-end PCB, and AI server supply chains, with a focus on the upcoming IPO of storage chip leader Changxin Technology and its capital spillover effects.

Key Developments

1. China's 'Lingsheng' Supercomputer Returns to TOP500 Top Spot — On June 23, 2026, at the ISC2026 conference in Germany, China's domestically developed 'Lingsheng' supercomputer topped the list with a sustained floating-point performance of 2.19 EFlops, reclaiming the top spot for the first time since 2017. This achievement was deployed by the National Supercomputing Center in Shenzhen. Portfolio implication: The supercomputing breakthrough validates the maturity of domestic CPUs/GPUs and interconnect technologies, benefiting companies involved in high-performance computing chips, advanced packaging, and cooling systems. Watch for subsequent government procurement and computing infrastructure bidding signals.

2. Changxin Technology Passes STAR Market IPO Review, Plans to Raise 29.5 Billion Yuan — Domestic storage chip company Changxin Technology passed the review of the STAR Market Listing Committee in June 2026, planning to raise 29.5 billion yuan (approximately $3.95 billion), making it the second-largest IPO in STAR Market history. This marks a major capital breakthrough for China's storage chip industry. Portfolio implication: This IPO will significantly increase capital attention on the storage chip sector and may drive valuation revaluation of supply chain supporting companies (e.g., packaging and testing, equipment, materials). It is recommended to position in relevant sub-sector leaders before the listing.

3. Electronics Industry Profits Surge 103.9% YoY from January to May, Becoming Core Support for Industrial Profits — From January to May 2026, profits in China's electronics industry surged 103.9% year-on-year, contributing 43.1% to the profit growth of industrial enterprises above a designated size, primarily driven by surging demand for AI chips, servers, and PCBs. Portfolio implication: The high industry prosperity is confirmed; it is recommended to continue holding AI hardware-related positions. Note whether profit growth has been fully reflected in stock prices and monitor Q2 sequential data.

4. PCB Leaders Fastprint and Hongboard Jointly Invest Nearly 5 Billion Yuan in Capacity Expansion — Two PCB industry leaders announced within two days a combined investment of nearly 5 billion yuan (approximately $668 million) for high-end capacity construction, directly targeting AI hardware demand. Among them, Fastprint plans to raise 3.9 billion yuan. Portfolio implication: The supply shortage for high-end PCBs is clear, and capacity expansion will strengthen leaders' market share. Watch for subsequent order commitments and the benefiting logic for upstream copper-clad laminate material suppliers.

5. Quantum Computing and Industrial 5G Breakthroughs: QuantumCTek Completes Dilution Refrigerator Engineering Prototype, MIIT Launches Industrial 5G Private Network Pilot — QuantumCTek completed the first engineering prototype of the domestically produced dilution refrigerator ez-Q F1500; meanwhile, the Ministry of Industry and Information Technology (MIIT) and four other departments jointly launched an industrial 5G independent private network pilot, supporting applications by large enterprises. Portfolio implication: Key progress has been made in domesticating quantum computing infrastructure, but commercialization is still early; the industrial 5G private network pilot will benefit related communication equipment vendors and industrial internet platforms, with limited short-term catalysts but promising long-term potential.

Sector Pulse

Risk Watch

• Overcapacity Risk — Multiple companies are expanding capacity on a large scale (PCB, packaging and testing, etc.). If AI demand growth slows marginally, there could be a temporary oversupply. Trigger condition: Global AI capital expenditure growth falls below expectations. Probability: Medium. Impact: Medium.

• Geopolitical Uncertainty — Although supercomputing breakthroughs and semiconductor IPOs show progress in domestic substitution, external technology restrictions may escalate, affecting key equipment and material supplies. Trigger condition: The U.S. or allies tighten export restrictions on semiconductor equipment and EDA software to China. Probability: Medium. Impact: High.

• Valuation Bubble Risk — AI hardware-related stocks have seen rapid valuation expansion driven by profit surges and capital sentiment. Some companies have already issued risk warnings (e.g., AI hardware stocks driven by ByteDance procurement). Trigger condition: Industry profit growth slows or liquidity tightens. Probability: Low. Impact: High.

Outlook

Key Events and Data to Watch Next Week:

• The official listing date and first-day performance of Changxin Technology, which may drive overall valuation of the storage sector.
• Official PMI data for June 2026 (especially the electronics industry new orders index) to verify demand sustainability.
• Progress on Lenovo ISG China's 100-billion-yuan revenue target and subsequent customer order disclosures.

Position Suggestion: Maintain overweight positions in AI hardware (semiconductors, high-end PCBs, servers) and quantum computing concepts, but control positions in stocks with excessively high valuations, waiting for mid-year report performance verification before making adjustments.