Dual Engines of Capital and Policy Drive Acceleration in Domestic Hard Tech Substitution and AI Commercialization

Period: 2026-01-19 — 2026-01-25 | Sources analyzed: 32 | Avg. relevance: 8.3/10

Bottom Line

This week's core signal is clear: capital activity and policy support in the semiconductor and AI sectors have simultaneously reached high intensity, marking the entry of the domestic substitution process into a phase of scaled implementation and earnings realization. Investors should act decisively, further shifting their allocation focus towards semiconductors (especially memory, power, and advanced manufacturing equipment) and AI application segments with clear commercialization scenarios, actively participating in upcoming large-scale hard tech IPOs.

Key Developments

1. Yangtze Memory Technologies (YMTC) Submits IPO Application to STAR Market, Aims to Raise 295 Billion Yuan — The domestic memory chip leader officially initiates its listing process, setting a record for the largest fundraising scale on the STAR Market recently, demonstrating unprecedented capital support from the national level for core semiconductor segments. Portfolio implication: This is not merely an IPO event but a powerful confidence boost for the entire semiconductor industry chain, including equipment, materials, and design. Investors should position early in upstream equipment (e.g., ACM Shanghai) and material companies with close supply chain ties to YMTC, and watch for overall revaluation opportunities in the memory chip sector.

2. Domestic Substitution in Power Semiconductors Enters "Decisive Phase," Third-Generation Semiconductors Achieve Dual Breakthroughs in Capital and Technology — Third-generation semiconductors represented by SiC and GaN have achieved breakthroughs in key technologies such as 8-inch substrates, while industrial capital investment is highly active. The adoption of domestic devices in fields like new energy vehicles and photovoltaics is accelerating. Portfolio implication: The investment logic must shift from "thematic investing" to "earnings verification." Focus on IDM or design companies that have achieved scaled mass production and entered the supply chains of leading customers, and deploy along the entire industry chain from substrate-epitaxy-device-module. For traditional power device companies, assess their progress in transitioning to third-generation technologies and capacity.

3. Memory Chip "Super Cycle" Confirmed, Annual Capacity Sold Out — Major memory manufacturers report full-year capacity sold out, with industry supply-demand imbalance expected to persist. Despite short-term sector volatility, technology/semiconductor ETFs have seen massive net inflows for 6 consecutive days (totaling 287.4 billion yuan), indicating long-term capital's firm optimism. Portfolio implication: The rising cycle of memory prices will directly improve the gross margins and profitability of memory chip manufacturers. Increasing allocation to leading memory chip manufacturers and packaging & testing firms is a definitive strategy. Simultaneously, massive ETF inflows imply ample overall liquidity in the semiconductor sector, supporting valuation benchmarks. Utilize short-term adjustment opportunities to increase core positions.

4. China's AI Industry Scale Expected to Exceed 1.2 Trillion Yuan, Competition Enters "Scenario-Dominant" Era — The core AI industry scale is expanding rapidly, with intelligent computing power reaching 1590 EFLOPS. Industry focus is shifting from large model R&D to practical applications integrated with vertical industries, marking the beginning of the value creation stage. Portfolio implication: Shift investment focus from general large model companies competing on "computing power and parameters" to "AI + Industry" solution providers with deep industry know-how, scarce data resources, and mature implementation scenarios in specific fields like finance, industry, government affairs, and healthcare. Seek targets that can significantly enhance efficiency or create new business models through AI.

Sector Pulse

Risk Watch

• Risk of External Maximum Pressure Disrupting Technology Catch-Up Process — In areas like advanced semiconductor processes, equipment, and AI foundational frameworks, international technology blockades and supply chain decoupling pressures may intensify alongside China's technological progress, potentially disrupting some companies' technology roadmaps or overseas market expansion plans.

  • Probability: Medium
  • Impact: High

• Risk of Capital Overheating and Valuation Bubbles — The hard tech sector continues to attract massive capital (e.g., semiconductor ETFs seeing nearly 100 billion yuan in single-day inflows), potentially causing valuations of some Pre-IPO companies and secondary market stocks lacking core technology or clear profit paths to detach from fundamentals, increasing market volatility.

  • Probability: Medium
  • Impact: Medium

Outlook

Key events and indicators to monitor next week:

• Follow-up review progress and market inquiry pricing for IPO applications of hard tech companies like Yangtze Memory Technologies and Shanghai Suiyuan Technology.
• More semiconductor companies (especially in equipment and materials) releasing 2025 annual performance forecasts, verifying the transmission of industry prosperity.
• Implementation details of policies regarding data element valuation and AI industry support issued in Beijing, Shanghai, and other regions.

Positioning consideration: Maintain overweight recommendations for the semiconductor and AI sectors, but structurally concentrate on domestic substitution "standard-bearers" that have achieved technological breakthroughs and entered earnings release cycles, as well as leading application-end players with clear AI commercialization monetization paths. Remain cautious towards pure concept-driven targets.