The Demand-Supply Structure Common to Three Market Cycles and the Semiconductor Cycle

The two transactions revealed earlier this year by Chinese investor Duan Yongping have drawn significant attention from market participants. One involves the continued accumulation of Kweichow Moutai (Maotai) shares, and the other involves a sharp increase in NVIDIA holdings. According to “Tiger Sniff Net’s” Lao Qian Ri Ri Tan, the 13F filing for H&H International Investment, managed by Duan Yongping, lists NVIDIA as the third-largest holding after Apple and Berkshire Hathaway.

Amid rallying cries of slogans like “Young people no longer drink liquor; semiconductor technology is the future,” Duan Yongping’s actions serve as a nexus connecting two eras. Despite the stark differences in industries, this article posits that a common investment structure underpins them both.

Three Cycles Across Eight Years

From early 2019 to July 2026, the A-share market has experienced three distinct thematic market cycles. The first was the liquor consumption market from early 2019 to early 2021, which saw about two years of growth followed by a sustained downturn. The second was the new energy vehicle market, which rose for about two and a half years from early 2020 to the end of 2021 or mid-2022, corrected until September 2024, and then rebounded. The third is the ongoing AI semiconductor market, which began in September 2024 and has entered a phase of volatility and correction after two years of growth.

What these cycles share is the combination of short-term supply rigidity and rapid demand growth, which drove continuous price increases. Price itself acts as the core signal and the timer for these cyclical upswings.

The Dynamics of Growth Under Supply-Demand

Constraints

In the liquor market, Maotai’s supply was uniquely determined by the production of base liquor five years earlier. As the growth in past production was slow, future supply was capped. This was compounded by the upgrading of consumption and stockpiling demand fueled by the wealth effect of real estate, creating a structure where distributors, resellers, and consumers collectively held onto their inventory. This mirrors a stock market rally characterized by rising prices amid declining trading volumes.

In the new energy vehicle market, upstream lithium carbonate prices skyrocketed from 40,000 yuan per ton in 2020 to a peak of 570,000 yuan in 2022. Minerals cannot be rapidly scaled up in the short term, and the supply gap forced prices upward. Coupled with an explosion in new energy vehicle sales, a complete supply-demand mismatch emerged.

A Parallel in the Semiconductor Sector

The current AI semiconductor market follows the same pattern. Memory and other semiconductor products face supply constraints due to limitations in lithography equipment and rare materials. Meanwhile, explosive demand growth driven by AI adoption supports price increases.

While upward trends may contain speculative bubbles, they are also grounded in rational logic. The inability to rapidly expand supply in the face of clearly accelerating demand growth explains why investors find it difficult to exit a potential bubble prematurely.

Patterns of Adjustment and Predictive Mechanisms

A-share investors have a habit of preemptively selling in the face of risk. Whether or not the market cycle has truly peaked, suspicions lead to immediate risk pricing, followed by a reassessment after the premium has dissipated.

The liquor market peaked in early 2021, even though its fundamentals had not clearly worsened. The U.S. Treasury yield peak was cited as a reason, but it wasn’t until 2025–2026 that the fundamentals of the liquor market entered a downturn, confirming that stock prices had led the way. Similarly, the new energy market followed liquor in declining in early 2021, with the soaring lithium carbonate prices affecting the entire industrial ecosystem and causing another drop by early 2022. In both cases, the market preemptively priced in doubts.

The semiconductor market began experiencing volatility and corrections in early 2026 despite the rapid growth of the AI industry. The current decline essentially reflects the unwinding of excessive premiums. Whether this is a temporary pullback or a genuine downturn will only be clear once risk pricing is complete.

Stock prices often anticipate fundamental changes. It is meaningless to argue against short-term declines based on current fundamentals, as market pricing itself is the result of time’s influence. There are countless false declines, but one will inevitably be real. It doesn’t matter which; only those who act as if each one is the last will ultimately make the correct judgment.

Editorial Opinion

In the short term, the AI semiconductor market has faced adjustment pressures since entering 2026. The process of unwinding excessive premiums continues, and it is difficult to discern a clear direction until the volatility caused by external factors subsides. Following past patterns, a preemptive decline may complete ahead of any fundamental deterioration, which seems to describe the current phase.

In the long term, the supply-demand dynamics of AI semiconductors function under the same logic as those of liquor and new energy. As long as supply constraints persist and demand continues to expand, the price uptrend will remain intact. However, as with the previous two cycles, risks such as demand-supply reversals or technological substitutions could always alter the structure. The unique aspect of the semiconductor industry is that advances in manufacturing technology could potentially eliminate supply constraints altogether.

The key question from an editorial perspective is whether the “supply ceiling” for AI semiconductors is truly immovable. Unlike Maotai’s base liquor production or lithium mining resource limits, semiconductor manufacturing capacity can expand over time through Fab investments and technological innovation. Is the current adjustment anticipating a structural narrowing of the supply-demand gap, or is it merely the resolution of temporary over-exuberance?

References

• ” 三轮行情主线的命运 ”, by 老钱日日谈 — 虎嗅网, 2026-07-22T10:15:00.000Z (ARR)
• Source URL: https://www.huxiu.com/article/4877378.html?f=rss