Hong Kong stocks climb from 2-month low as Beijing’s ban on Micron Technology propels rally in Chinese chip makers

The Chinese government said Micron’s products posed a national security risk and would be banned from sale to information infrastructure operators

China’s Semiconductor Manufacturing International Corporation and Hua Hong Semiconductor surged as traders piled in to local microchip firms

Reading Time:2 minutes

Hong Kong stocks climbed from a two-month low on Monday morning. Photo: AP

Published: 10:34am, 22 May 2023Updated: 4:39pm, 22 May 2023

Hong Kong stocks climbed from a two-month low on Monday as Beijing’s ban on Micron Technology propelled a rally in Chinese chip makers.

The Hang Seng Index jumped 1.2 per cent to 19,678.17 at the close of trading, the biggest gain in a week. The Hang Seng Tech Index gained 2.1 per cent, and the Shanghai Composite Index, mainland China’s benchmark, added 0.4 per cent.

Tencent Holdings climbed 2.1 per cent to HK$340.20, Alibaba gained 1.4 per cent to HK$83.60. Wuxi Biologics surged 5.7 per cent to HK$44.55 and Alibaba Health jumped 4.7 per cent to HK$4.90. Electric car maker BYD gained 3 per cent to HK$251.40.

China’s chip champion, Semiconductor Manufacturing International Corporation, jumped 1.2 per cent to HK$21.05 while Hua Hong Semiconductor climbed 0.9 per cent to HK$27.25 as traders piled in to local microchip firms.

In the latest flare-up of tensions between the two economic giants, the Chinese government said on Sunday that US memory chip company Micron Technology’s products posed a national security risk and would be banned from sale to China’s key information infrastructure operators.

“Micron’s business in China may be affected, and customers will shift to other domestic or foreign suppliers,” Citic analyst Xu Tao said in a note on Monday, adding that he’s optimistic about investment opportunities in the memory chip industry as “domestic replacement” accelerates.