On October 7, sentiment in the Hong Kong stock market weakened, the Hang Seng Tech Index pulled back in tandem, and Hong Kong's semiconductor sector suffered a broad selloff.

By the close, Montage Technology (06809.HK) had fallen 6.37%, while Axera (00600.HK), SICC (02631.HK), GigaDevice (03986.HK), NOVOSENSE (02676.HK), and Hua Hong Semiconductor (01347.HK) also declined in step, with concentrated selling pressure hitting many of the sector's earlier AI computing power chip names.

Hong Kong's semiconductor sector spans multiple sub-tracks including memory, AI chips, power semiconductors, wafer foundry, and semiconductor materials. It had previously benefited from rising global AI computing power capital expenditure, pushing sector valuations steadily higher and trading crowding notably upward.

The pullback was driven by a combination of factors.

Externally, overseas U.S. Treasury yields remained elevated, and the Federal Reserve's September policy meeting struck a hawkish tone, weighing on global tech growth stock valuations. Overnight sentiment in overseas semiconductor and memory names was weak, with SK Hynix (SKHY.US) plunging 6.39%, and the decline in risk appetite transmitted to Hong Kong.

On top of that, the southbound trading channel is currently suspended, leaving Hong Kong liquidity relatively weak and lacking mainland capital to absorb supply, which amplified the pullback in high-beta semiconductor names.

On the trading side, the sector had accumulated a certain amount of profit-taking positions earlier, and the willingness to cash out remained fairly strong, with AI computing power-related chip names becoming a key focus of reduction. The market has also begun to re-examine the sustainability of AI chip orders, worrying that the pace of computing power capital expenditure may fall short of expectations and that the upward slope of memory chip prices is slowing, prompting a revision of profit expectations for memory and interface chip companies.

In addition, competition in the industry is intensifying, with domestic and overseas chipmakers continuing to expand capacity, raising market concerns that subsequent supply increases will squeeze product gross margins.

Looking ahead, some optimistic institutions believe the long-term demand theme for AI computing power remains intact, global data center construction continues to advance, and demand for AI chips, memory interface chips, and high-speed storage is rigid, with orders from leading manufacturers still supported over the medium to long term. Domestic substitution continues to advance, with domestic chip design, wafer manufacturing, and power semiconductors steadily entering local supply chains, while domestic industrial policy continues to support semiconductor self-sufficiency, leaving clear long-term growth space.

But there are also cautious institutions that believe capacity expansion in some semiconductor segments will bring supply pressure, intensifying chip price competition and squeezing corporate profit margins. Some design companies remain highly dependent on overseas supply chains, posing geopolitical uncertainty. In addition, Hong Kong liquidity is relatively weak, and the semiconductor sector's valuation is highly sensitive to interest rates and foreign capital sentiment, remaining under pressure in a high U.S. Treasury yield environment.

It is worth noting that, as a core hard-tech track in Hong Kong, whether several leading semiconductor companies in the sector, such as GigaDevice and NOVOSENSE, can gain recognition from the Top 100 Hong Kong Listed Companies Research Center and make the candidate list for the 13th Top 100 Hong Kong Listed Companies is also worth continued market attention.

Since its launch in 2012, the Top 100 Hong Kong Listed Companies selection has consistently used scientific evaluation criteria to identify the most investment-worthy listed companies on the Hong Kong Main Board and has become a benchmark for value in Hong Kong's capital market.

The 13th Top 100 Hong Kong Listed Companies selection is now officially underway, with an awards ceremony planned for November 26, 2026, at the Hong Kong Convention and Exhibition Centre.

For more selection information and registration details, please follow the official website of the Top 100 Hong Kong Listed Companies.