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October 19, 2025

Contrary to widespread fears about the economic outlook, key credit indicators are turning more bullish. Default rates for high yield debt and loans have peaked, along with delinquency rates for auto loans and credit cards, see charts below.

Three factors explain why corporate default and consumer delinquency rates are moving lower:

1) Uncertainty related to the trade war is significantly lower than its peak during Liberation Day.

2) The ongoing AI boom is boosting the buildout of data centers and related energy infrastructure. Simultaneously, higher stock prices are supporting consumer spending.

3) Investors are increasingly recognizing that we are in the early stages of an industrial renaissance across sectors like aerospace, defense, manufacturing, biotech and technology/automation.

In summary, while the trade war remains a mild drag on growth, its impact is being more than offset by the tailwinds from the AI boom and the industrial renaissance. Consequently, there is a growing upside risk that economic growth will reaccelerate over the coming quarters.

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AMIES Technology, a new Chinese lithography equipment manufacturer that showcased its latest chipmaking products at an industry event in Shenzhen last week, is offering renewed optimism in the nation’s drive to reduce its dependence on Dutch giant ASML.

The company presented a wide range of products – including compound-semiconductor lithography machines, laser-annealing systems, advanced inspection tools and solutions for packaging and wafer bonding – at the WeSemiBay Semiconductor Ecosystem Expo 2025, which featured more than 600 exhibitors, such as Huawei Technologies partner SiCarrier.

Advanced lithography remains a significant bottleneck in China’s chipmaking ambitions. The country still trails far behind global leaders in the technology and is restricted from acquiring ASML’s top deep ultraviolet (DUV) and extreme ultraviolet (EUV) systems due to US export controls.

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Founded in February, AMIES is a spin-off from China’s leading lithography company, the state-owned Shanghai Micro Electronics Equipment (SMEE). While SMEE focuses on developing essential front-end tools, AMIES aims to commercialise equipment more swiftly, according to Chinese media reports, citing company representatives.

US-sanctioned SMEE excels in back-end semiconductor processes like packaging, which often require less advanced lithography technology. When it comes to front-end wafer fabrication, however, it is still trying to catch up with Western leaders such as ASML.

AMIES was spun off from SMEE in February. Photo: Handout alt=AMIES was spun off from SMEE in February. Photo: Handout>

The Chinese company’s most reliable production-grade lithography tools are believed to support processes around 90-nanometre node and above. In late 2023, its shareholder Zhangjiang Group briefly claimed on social media that SMEE had “successfully developed a 28-nm lithography machine”, but later retracted the reference.

In contrast, ASML’s EUV systems are used by leading chipmakers for processes at 2-nm nodes and below.

For now, AMIES said its flagship product is its advanced packaging lithography machine, which held a global market share of 35 per cent and a 90 per cent share in China.

On its website, AMIES lists four product lines: integrated circuits, advanced packaging, compound semiconductors and flat-panel displays. These encompass various types of annealing, inspection, chip manufacturing and packaging tools.

In August, the company said it shipped its 500th stepper lithography machine. Steppers expose chip patterns on wafers one section at a time, unlike scanners, which continuously move the mask and wafer for faster, more precise exposures.

AMIES received an award at the China International Industry Fair in September for its “next-generation fan-out packaging lithography system”.

The company has received solid state support. AMIES’s nearly 30 shareholders include local government-backed funds such as Shanghai Information Investment, Spinnotec, the venture arms of Zhangjiang Hi-Tech Park and Citic Group, alongside a number of private equity investors, according to the Chinese corporate database Tianyancha.

AMIES said it had a technical team of 600 people, with an average age of 33, and 65 per cent holding master’s or doctoral degrees.

As part of China’s broader push for chip self-reliance across the supply chain, various players are racing to develop domestic DUV and EUV tools. Shenzhen-backed chip equipment firm SiCarrier, for example, is reportedly working on advanced-node lithography machines, although it has not publicly unveiled such products.

Zetop Technologies – partially owned by SiCarrier and the US-sanctioned Changchun Institute of Optics, Fine Mechanics and Physics under the Chinese Academy of Sciences – counts key EUV optics researchers among its shareholders.

Shanghai-based Yuliangsheng, in which SiCarrier also has a stake, supplied a 28-nm DUV system to Semiconductor Manufacturing International Corporation, China’s largest semiconductor foundry, for testing in 7-nm chip production, according to a Financial Times report in September.

In the third quarter, ASML reported total net sales of €7.5 billion (US$8.8 billion), with China accounting for 42 per cent of system orders.

However, ASML expected a sharp decline in demand from China next year, as tensions between the US and China, coupled with Beijing’s recent export controls on rare earth materials essential for ASML’s machines, have further complicated the global semiconductor supply chain.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2025. South China Morning Post Publishers Ltd. All rights reserved.

Embracing technology platforms for applications such as electronic proxy voting, private debt underwriting and trading of repurchase (repo) agreements can help Hong Kong elevate its standing as Asia’s top financial hub, according to a leading US fintech firm.

Technologies that simplified investor engagement had been a catalyst for growth in other markets, said Tim Gokey, CEO of New York-listed Broadridge Financial Solutions, adding that fintech could enhance corporate governance and product innovation to help the city strengthen its connections with mainland China and the wider world.

“We’re investing in the region and are excited to be part of the rapidly growing Hong Kong market, which is emerging as a leading financial hub in Asia and the primary point of connectivity between the mainland and global markets,” Gokey said in an interview during a trip to the city last month.

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His comments came before financial regulators in Hong Kong and mainland China unveiled a series of measures last month to allow cross-boundary bond repo business and to strengthen the city’s fixed income and currency markets – all initiatives that had been discussed and anticipated among market participants for a number of years.

“We see a strong opportunity to support that growth by enhancing trust and transparency in corporate governance,” added Gokey, whose firm doubled its Asian team to nearly 500 over the past five years, with Hong Kong accounting for more than 80 people.

As companies increasingly turned to capital markets, beyond banks, for fundraising, the transparency and trust of corporate governance became essential, he said, pointing to the US as an example.

Tim Gokey, CEO of New York-listed Broadridge Financial Solutions. Photo: Handout alt=Tim Gokey, CEO of New York-listed Broadridge Financial Solutions. Photo: Handout>

“Strong corporate governance is one of the key drivers behind the success and confidence in US capital markets,” he said. “It’s not the sole answer, but a crucial contributing factor.”

Broadridge’s corporate-governance offerings, including proxy-voting platforms, have a global reach, processing shares held in street names at more than 1,000 broker-dealers and custodian banks. Its proxy services covered about 80 per cent of outstanding shares of US publicly listed companies in 2023.

“Leveraging technology to simplify investor engagement has fuelled growth in markets like Japan, and building similar trust and transparency in Hong Kong is vital for its ambition to enhance connectivity between the mainland and the rest of the globe and become Asia’s leading financial hub,” Gokey said.

A pain point that Broadridge aims to address is improving the distribution of information on corporate-governance processes, which was often well documented but not effectively shared.

Digitising materials and enabling convenient access and voting through an app or broker platform would make it easier for retail investors to engage with the companies they invested in, he said.

“Our platform brings transparency and enables retail investors – particularly those using digital brokers in Hong Kong who may hold shares across China, the US and Europe – to conveniently vote their shares globally under different regulatory regimes,” he said.

For institutional investors, the firm was developing a data-driven voting platform that used artificial intelligence to apply preset rules to votes, moving beyond traditional recommendation-based systems to make proxy voting more efficient and customised, Gokey said.

Another focus area for Broadridge in Asia is private debt – a growing asset class in the region. The firm’s cloud-based platform aimed to help asset managers with tasks from underwriting and working through deals to keeping deals on their books and record-keeping, reducing risks associated with managing collateralised loan obligations.

Gokey said the fintech company also saw opportunities in tokenised assets and their clearing and settlement in Hong Kong, as market conditions and regulatory initiatives increasingly aligned with participants’ needs.

Hong Kong authorities have launched several plans to future-proof the city’s financial infrastructure in recent years, including initiatives like stablecoins, electronic trading platforms and tokenised products.

“We believe [our solution] is well-suited for this market due to clients’ need for liquidity, financing and risk management, as well as regulators’ push for digital assets,” Gokey said. “By leveraging existing infrastructure, we can help jump-start repos on the distributed ledger in Hong Kong and build confidence around these instruments.”

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2025. South China Morning Post Publishers Ltd. All rights reserved.

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