Mainland shares of semiconductor and robotics companies have entered a steep decline since the third quarter, sparking reports that the speculative fever surrounding artificial intelligence in China has finally ended. The tech-heavy STAR50 index, which tracks chip leaders like SMIC and Cambricon, has fallen 40% from its July peak to wipe out an estimated $480B in market value in less than four months. The rout has seen the valuation of robotics firm Unitree halve since its August listing, with Reuters reporting that the crash was driven by a collapse in lofty valuations amid concerns over AI demand and US export restrictions.
To stem the freefall, state-led funds have purchased approximately $2.5B a day in equity ETFs since July, including $19B in inflows across nine known state-favored ETFs last week. However, the support has failed to reassure the broader market, which has now traded in the red for 11 consecutive weeks. Investors dumped shares in the final hour of the most recent session after state intervention appeared to wane, keeping the CSI 300 index in bear market territory.