Semiconductor equipment sector pulls back, Guotai Semiconductor Equipment ETF (159516) drops over 3%. Driven by AI demand, the semiconductor industry is experiencing rapid growth; a pullback may present a good entry point.

March 31, the semiconductor equipment sector pulled back. The Cathay Semiconductor Equipment ETF (159516) fell by more than 3%. Driven by AI demand, the semiconductor industry’s scale is growing at a high rate; any pullback may be an opportunity to enter.

Huatai Securities noted that AI demand could cause the semiconductor industry’s scale to approach $1 trillion a year up to four years earlier. SEMI expects the global semiconductor industry growth rate in 2026 to reach 23%. Storage volume and pricing rising together are the main drivers of the industry’s growth exceeding expectations. Unless consumer electronics demand falls significantly, price increases and a shortage situation are likely to persist throughout the year. Advanced packaging is seeing a clear surge in interest; within the industry, the focus has shifted from advanced process technologies to CoWoS and panel-level packaging (PLP). Wafer-level packaging and back-end equipment are expected to see a revaluation; China’s advanced packaging rollout has entered a three-way coordinated stage of “wafer fabs filling the gaps + OSAT expanding capacity + equipment localization.”

The Cathay Semiconductor Equipment ETF (159516) tracks the Semiconductor Materials Equipment Index (931743). This index focuses on the materials and equipment segments within the semiconductor industrial chain. Its constituent stocks mainly include companies engaged in semiconductor materials production, processing, and related equipment manufacturing. This index reflects market performance and technology innovation trends in the upstream areas of the semiconductor industry. It is one of the important indicators for measuring semiconductor industry development.

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