By Jiahui Huang

Chinese chip-related stocks surged after Beijing said homegrown companies have made progress in developing advanced chip-making equipment, part of ongoing efforts to soften the impact of U.S.-led sanctions.

Shares of Chinese semiconductor companies rose sharply in Shanghai and Shenzhen on Wednesday, with some reaching the daily limit.

Changchun Up Optotech advanced 10% and Semiconductor Manufacturing International Corp. rose 1.8%.

Industrial-equipment company Sanhe Tongfei Refrigeration and optical-component maker Nanjing Wavelength Opto-Electronic Science and Technology led gains, up 20% each.

The gains came after Chinese state media said the country made a breakthrough in developing advanced chip-making equipment.

The latest China-made laser-based immersion lithography machine, which uses light to print on photosensitive surfaces, has a resolution of 65 nanometers or better, China's Ministry of Industry and Information Technology said.

The statement was initially posted by the Chinese ministry earlier this month and reposted by state media over the weekend. Chinese stock markets reopened for trading Wednesday following a three-day holiday earlier this week.

Despite this, Chinese lithography technology is likely still behind that of ASML, one of the world's most important chip-making equipment makers.

China has been stepping up efforts and investment into developing chip-making equipment capabilities after the U.S., Japan and the Netherlands in 2023 agreed to curb exports of chip-making equipment to China, as part of efforts to slow the country's military development by restricting access to advanced technologies.

Write to Jiahui Huang at jiahui.huang@wsj.com

(END) Dow Jones Newswires

September 18, 2024 05:02 ET (09:02 GMT)

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