HK Stock Market Move | Hua Hong Grace Semiconductor (01347) surged nearly 7% in the afternoon. The company is leading in capacity expansion at mature nodes, and price increases are expected to bring profit elasticity.

Hua Hong Grace Semiconductor (01347) surged nearly 7% in the afternoon. As of the time of writing, it is up 5.84%, priced at 134.2 HKD, with a transaction volume of 4.557 billion HKD. In news, the wafer foundry industry has initiated a price increase. TSMC previously announced plans to raise prices on both mature and advanced processes starting in 2027, with the basic increase varying between 5% and 10%, depending on the customer and product. Vanguard in July raised the prices of storage wafer shipments by 45%, with price increases for logic semiconductor foundry services ranging from 10% to 15%. Bank of China International released a research report stating that Hua Hong Grace Semiconductor is leading in expansion at mature nodes. Fab 7 and the Wuxi plant are currently at full capacity, while Fab 9A is expected to reach production by the end of the third quarter, and Fab 9B is projected to reach production by the end of 2027. Coupled with Huali Micro's Fab 5 coming online in the fourth quarter, this will drive the annual revenue operating rate to approximately 4 billion USD by the end of 2026, significantly exceeding market expectations. The price increase initiated in April will bring substantial profit margin flexibility. The firm raised the target price for Hua Hong from 152.4 HKD to 210 HKD, maintaining a "Buy" rating.