Shares of Semiconductor Manufacturing International Corporation (SMIC) surged 14.97% during intraday trading on Tuesday, significantly outperforming the broader market.

The sharp rise is primarily attributed to Huawei's official announcement of a new semiconductor development principle termed the "Tau (τ) Law" on May 25th. This principle shifts the industry focus from geometric scaling to prioritizing logic compression and time efficiency, opening a "second curve" beyond Moore's Law. Analysts view SMIC as the key platform for the industrialization of this new technological roadmap, given its status as the sole major domestic manufacturer capable of providing Huawei with advanced process nodes like 14nm, 7nm, and N+3. SMIC's processes are deeply synergistic with Huawei's needs, and the tech giant's Kirin, Ascend, and Kunpeng chips are reportedly 100% outsourced to SMIC with locked-in, massive capacity requirements for up to five years.

Furthermore, the rally was bolstered by recent policy guidance from China's top economic planner, which called for domestic large AI models to intensify their adaptation to domestic computing power chips. This statement elevates the strategic coordination between domestic AI development and domestic chipmakers like SMIC to a clear policy level, providing additional tailwinds for the company's prospects.