Chinese stocks fall sharply as chipmakers lead selloff

Chinese stocks came under heavy selling pressure on Wednesday, with the Shanghai Composite falling 2.40% to 3,894.4 and the Shenzhen Component dropping 5.01% to 13,890.2.

The selloff was led by semiconductor stocks. Rising government bond yields, persistent inflation, high fiscal spending and heavy debt issuance have increased concerns about borrowing costs. Geopolitical tensions and fears of energy supply disruptions added to worries that inflation could stay high.

The pressure on chip stocks intensified after GigaDevice reported its first-half 2026 results. Revenue jumped 178.7% year-on-year to RMB 11.57 billion, while net profit surged 1,091.5% to RMB 6.86 billion. However, the results came in slightly below the company's expectations.

Major semiconductor stocks fell sharply. SMIC declined 5.16%, Cambricon Technologies dropped 9.64%, Hygon Information Technology fell 7.26%, and GigaDevice lost 7.56%. Hua Hong Semiconductor, Zhongji Innolight, Eoptolink Technology and NAURA Technology also fell between 8% and 12%.

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