Micron Shares Fall 11% as China Competition Fears Grow
Fell around 11% over five days as worries about Chinese competition and a possible memory-chip glut weighed on the sector. Analysts questioned whether China’s…
Micron stock dropped around 11% over five days as fears about Chinese competition and a possible memory-chip glut pressured the sector. Shares in SK Hynix and Samsung fell further, while analysts questioned whether China’s CXMT can produce its new server-memory design at scale.
The sell-off has put investors’ focus on two uncertainties: whether CXMT can challenge established memory makers and when expanding production could create oversupply. The concerns come as memory chips serve both consumer electronics and the expanding AI data center supply chain.
SK Hynix plunged 26% and Samsung fell 22% over the same five-day period, according to CNBC. The three companies have been among the hardest-hit names in a broader technology market decline.
Analysts question CXMT’s ability to scale
The initial jitters came at the start of the week, after CXMT announced plans for a server-memory product based on a new architecture. The design could allow higher storage density, prompting concern that the Chinese manufacturer might take market share from Samsung, SK Hynix and Micron.
But a technical breakthrough does not automatically mean mass production will follow. Analysts cited by CNBC questioned whether CXMT could manufacture the chips at sufficient yields.
Yield is the sticking point.
“The issue, of course, was with any architectural change ... you can make the chips, but what yield are you getting? If you're only getting a 50% yield, you're literally putting half the chips in the bin because they don't work very well,” Ben Barringer, global head of technology research at Quilter Cheviot, told CNBC’s “Squawk Box Europe” on Wednesday.
Kevin Cassidy, a senior research analyst at Rosenblatt Securities, said CXMT’s development was unlikely to add more memory supply to the market. “We don't think this is going to swing the supply-demand equation at all,” he told CNBC.
The distinction matters for buyers as well as investors. If production remains constrained, the new design may not quickly increase the supply available to chipmakers and data center operators. If CXMT can scale it, the competitive picture could change; the source does not establish that it has done so.
A 2029 supply concern adds to the pressure
Traders have also discussed an opinion column in South Korea’s Maeil Business Newspaper. The writer urged the country’s government to prepare for a slowdown in the AI boom and identify a future growth engine.
According to a CNBC translation, the column cited Professor Hwang of Seoul National University and Ahn Ki-hyun, executive director of the Korea Semiconductor Industry Association, as expecting a “flood of new supply” that could turn the memory market “into a red ocean” in 2029. The writer said the supercycle could be over by 2030, with the industry entering a downturn.
Elon Musk, identified by CNBC as SpaceX and Tesla CEO, responded in a post on X: China “will be making a LOT of RAM in 2028.” The forecast of a glut in 2029 has not been echoed by other analysts, CNBC reported.
Memory prices have risen as demand outstripped supply, with AI growth making memory a key component in Nvidia chips and other parts of the data center supply chain. Manufacturers are expanding capacity, but any future surplus could bring lower prices and squeeze profit margins for producers—pressure that would reach customers through a market whose supply and pricing are already central to AI infrastructure.
Investors are now weighing whether the traditional memory boom-and-bust cycle is changing or whether the industry could return to oversupply. CNBC reports that major memory makers are expanding capacity; the timing and scale of any resulting supply shift remain central to the debate.
Source: cnbc.com
