Chinese equities closed higher on Wednesday, extending the previous session's gains as strong buying in semiconductor stocks boosted investor sentiment. The Shanghai Composite Index rose 1.47% to 3,878.4, its highest close in nearly two weeks, while the Shenzhen Component advanced 1.86% to 14,144.2, marking its highest level in more than a week.

Semiconductor stocks led the rally after reports that South Korean tech giants Samsung Electronics and SK Hynix are evaluating chipmaking equipment from Chinese supplier AMEC for potential use at their manufacturing facilities in China. The move reflects growing concerns over the prospect of tighter US export restrictions on advanced semiconductor technology. Among the sector's gainers, SMIC climbed 3.59%, Hua Hong Semiconductor jumped 6.56%, and GigaDevice surged 8.26%.

In contrast, AI-related optical module stocks retreated after reports that the US is preparing new restrictions on imports of next-generation Chinese data-centre components. Zhongji Innolight fell 7.27%, while Eoptolink Technology lost 5.29%.

Meanwhile, gains were capped by weaker-than-expected economic data. A private survey showed China's Composite PMI fell to a one-year low in July. Manufacturing activity slipped to a four-month low, while the services PMI weakened to its lowest level in nearly two years, signaling a loss of momentum in the broader economy.