HK Semiconductor Stocks Decline at Open: Montage Technology Falls Over 4%
Claire Weston
Hong Kong stocks opened lower on Thursday with semiconductors leading the decline; Montage Technology fell over 4% as global capital keeps chasing markets with heavier AI compute exposure, exposing a structural gap in Hong Kong's index makeup.
Who got hit hardest at the open?
The Hang Seng Index opened down 0.27%; the Hang Seng Tech Index fell 0.31%, with semis leading the drop.
Montage Technology fell over 4%, GigaDevice also down over 4%, Hua Hong Semi down over 3%, and SMIC down nearly 1%.
This means → the sharpest losses are concentrated in chip design and fabrication names — capital is exiting the semiconductor chain.
What is this pullback really about?
Global capital is flowing first to markets with heavier AI compute exposure — think Nvidia's supply chain on US exchanges.
Hong Kong's index weight sits in internet platforms, financials, consumer, and the AI application layer; direct exposure to the compute supply chain is limited.
In plain terms = the world is bidding up "companies that build AI"; Hong Kong mainly holds "companies that use AI," so money goes elsewhere first.
This reflects the root cause of Hong Kong's underperformance over the past month-plus: structurally, it is not at the center of the current trade.
What are the houses saying — and where do they disagree?
CITIC Securities argues Hong Kong has finished a phase of bottoming and is shifting from valuation repair to earnings verification as the next driver.
China Galaxy Securities focuses on valuation, calling the Hang Seng Tech Index a historic valuation trough with limited room for further steep declines.
Guotai Junan International strikes a more cautious tone on second-half liquidity, flagging July and September as the year's two lock-up expiry peaks.
One line on where they agree — and where they split?
Agreement: most Hong Kong sectors sit at low valuation percentiles, offering a meaningful safety margin — meaning prices are already cheap enough that further downside is limited.
The split is over timing and the catalyst path — bulls expect the AI trade to broaden from compute hardware into applications, which would favor Hong Kong tech; bears worry that lock-up supply and funding pressure will weigh first.
In plain terms = everyone agrees Hong Kong is cheap, but "when does cheap start to pay off?" — the three houses give different timelines.
What is the key variable to watch?
Whether the AI trade can spread from pure compute (chip-making, GPU sales) to the application layer (cloud services, enterprise software, data platforms).
This means → if AI spending stays stuck at "buying hardware," Hong Kong's structural disadvantage stays; once money starts flowing to "companies that use the hardware," Hong Kong tech gets its shot at a valuation-framework switch.
China Galaxy expects 2026–2027 to be the critical revenue-realization window, when Hang Seng Tech's valuation logic could shift from "internet multiples" to "tech-growth multiples."
Content is for reference only, not financial advice.