On July 28, global chip stocks experienced a "Black Tuesday," with the CSI Semiconductor Materials and Equipment Theme Index plummeting over 6% in a single day, and continuing to drop more than 7% intraday the following day. However, amid the sharp decline, capital has been showing its conviction with real money—the Yifangda Semiconductor Equipment ETF (159558) saw net inflows of over 7 billion yuan on July 28 alone, with nearly 23 billion yuan flowing in over the past week, bringing its total scale to over 200 billion yuan. As the index falls, its share count rises.
Why are funds continuing to increase their positions?
What exactly does the Semiconductor Materials and Equipment Index buy? Let's examine this from several angles: index compilation, industry structure, core constituents, and financial performance.
Focusing on the Upstream Link, Investing in Chip Manufacturing's 'Pick-and-Shovel Sellers'
Semiconductor materials and equipment primarily correspond to two key links in the upstream of chip manufacturing. The first is equipment, including tools for etching, thin-film deposition, cleaning, inspection, and measurement. The second is materials, including core consumables like silicon wafers, sputtering targets, electronic specialty gases, and photoresists. Together, they form the fundamental support for chip manufacturing.
The CSI Semiconductor Materials and Equipment Theme Index selects 40 listed companies from the A-share market whose businesses involve semiconductor materials and equipment, adjusting the constituent stocks semi-annually. The maximum weight of a single constituent stock in this index is 15%. Currently, the top ten constituent stocks account for over 60% of the total weight, indicating a high concentration of leading companies. From an industry chain perspective, it invests in the "pick-and-shovel sellers" of the semiconductor upstream: regardless of how downstream application hotspots change, as long as wafer fabs expand production, upgrade production lines, and promote domestic substitution, equipment and material companies are expected to benefit first.
Industry Distribution: Equipment Dominant, Materials Supporting
From the perspective of the Shenwan Level 3 industry classification, the industry distribution of the CSI Semiconductor Materials and Equipment Theme Index is highly focused. Semiconductor equipment holds a dominant position with a weight of 67.6%, followed by semiconductor materials at 21.7%, and electronic chemicals at 10.2%. Note: Data sourced from Wind, industry distribution uses Shenwan Level 3 industry classification, as of June 30, 2026. This structure determines that the index is highly correlated with the expansion pace of domestic wafer fabs.
Typically, wafer fab expansion first requires equipment procurement, which then gradually reflects in capacity release and chip shipments. Therefore, equipment orders often lead chip shipments by 2 to 3 quarters, making the equipment sector more likely to show strong elasticity during the semiconductor upcycle. Although the weight of the materials sector is lower than that of equipment, links like silicon wafers, sputtering targets, and electronic chemicals are equally indispensable foundational components of the manufacturing process. The combination of equipment-dominant and materials-supporting allows the index to retain the high elasticity of the equipment side while ensuring comprehensive coverage of the semiconductor manufacturing upstream.
Top Ten Constituent Stocks: Distinct Characteristics of Leaders
Looking at the constituent stocks, the top ten companies in the CSI Semiconductor Materials and Equipment Theme Index are primarily concentrated among leaders in semiconductor equipment and materials, with a combined weight of 64.66%, highlighting their prominent leading attributes.
Table: Top Ten Constituent Stocks of the CSI Semiconductor Materials and Equipment Theme Index
Index Constituent Stock | Weight | Industry
Advanced Micro-Fabrication Equipment Inc. (AMEC) | 15.13% | Semiconductor Equipment
NAURA Technology Group Co., Ltd. | 13.41% | Semiconductor Equipment
Piotech Inc. | 7.09% | Semiconductor Equipment
Changchuan Technology Co., Ltd. | 6.53% | Semiconductor Equipment
Hwatsing Technology Co., Ltd. | 5.50% | Semiconductor Equipment
Skyverse Technology Co., Ltd. | 4.54% | Semiconductor Equipment
KDF Electronic Materials Co., Ltd. | 3.37% | Semiconductor Materials
Hefei Huafeng Testing Technology Co., Ltd. | 3.18% | Semiconductor Equipment
Kingsemi Co., Ltd. | 3.05% | Semiconductor Equipment
NSIG Integrated Circuit Manufacturing Co., Ltd. | 2.84% | Semiconductor Materials
Total | 64.66%
Note: Data sourced from Wind, as of July 1, 2026. The top two weighted stocks, AMEC and NAURA Technology, together account for nearly 30% and are the dual leaders in the etching and thin-film deposition equipment fields. The top ten also include companies like Piotech, Hwatsing Technology, and Skyverse Technology, covering equipment segments such as thin-film deposition, chemical mechanical polishing, and wafer inspection. Meanwhile, KDF Electronic Materials and NSIG cover materials like sputtering targets and silicon wafers, forming a complete "equipment + materials" industry chain coverage.
Performance Growth is a Key Support for the Rally
On a consolidated basis, in the first quarter of 2026, the total operating revenue of the constituent stocks in the CSI Semiconductor Materials and Equipment Theme Index grew by 26.9% year-on-year, while net profit attributable to parent companies grew by 43.6% year-on-year. The net profit growth rate significantly outpaced revenue growth, indicating that the sector's profitability is still improving. This profit elasticity is related to the business model of the semiconductor equipment industry. Equipment companies have large upfront R&D investments and high fixed costs, but once order volumes ramp up and capacity utilization rates improve, revenue growth is more easily converted into higher profit growth rates. Coupled with the continuous expansion of domestic wafer fabs and the increasing rate of equipment localization, the equipment and materials segment remains one of the more certain directions within the semiconductor industry chain.
Of course, after a significant recent rally, short-term risks must be viewed objectively. The current valuation of the semiconductor equipment sector is already in a historically high range, with increased trading congestion and volatility. Periodic corrections are not unexpected. Moving forward, the market will focus more on whether financial results can meet expectations, whether equipment orders will continue to be revised upward, and whether the pace of downstream capital expenditure remains stable. Only if earnings growth consistently matches valuation levels will the sector's rally have more solid medium-term support.
The Yifangda Semiconductor Equipment ETF (159558) tracks the CSI Semiconductor Materials and Equipment Theme Index, with its latest scale exceeding one billion yuan. For off-market investors without a stock account, the Yifangda CSI Semiconductor Materials and Equipment Theme Index ETF Link Fund (A/C: 021893/021894) can also be used for allocation. If you have further questions about index investing or want to check more detailed data, open the "Index Express" WeChat mini-program and ask the AI directly for professional answers.