Memory and storage stocks faced heavy selling pressure on Monday, driven by a blockbuster IPO from Chinese chipmaker ChangXin Technology Group (CXMT) and reports that China has started manufacturing domestically developed deep ultraviolet (DUV) lithography machines. The twin developments heightened investor concerns that the country’s semiconductor industry is rapidly narrowing the technology gap with global leaders.
CXMT’s market debut sends shockwaves
CXMT shares surged nearly 466% on their first day of trading on Shanghai’s technology-focused STAR Market, making the company the most valuable China-listed chipmaker. According to Counterpoint Research, its share of the global DRAM market reached approximately 8% in the first quarter, nearly tripling over the past year. While still well below Micron’s estimated 22%, the pace of growth has rattled investors. Nomura projects that CXMT could increase its market share to about 18% by the end of 2028, supported by a planned production expansion from 280,000 12-inch wafers per month at the end of 2025 to 550,000 by the end of 2028 through new lines in Shanghai.
Reports that Apple is testing DRAM chips supplied by CXMT accelerated the selloff, raising the possibility that a major consumer electronics firm could source memory from a Chinese producer sooner than expected. Still, analysts note that CXMT remains well behind in high-bandwidth memory (HBM) used in AI servers, where Micron, Samsung, and SK Hynix dominate.
China’s lithography advance amplifies pressure
Further fueling the decline, The Information reported that China has begun producing its own immersion DUV lithography machines and is developing a domestic EUV prototype. Dutch giant ASML, which controls the global market for advanced lithography equipment, fell 6% on the news. Chinese chipmakers have been forced to rely on ASML’s DUV systems after US-led export restrictions blocked access to EUV tools since 2019, but the new domestic capability threatens to erode incumbents’ technological edge.
Earnings week to set the tone
The selloff comes just as the Roundhill Memory ETF (DRAM) braces for a pivotal earnings period. Major constituents including Samsung Electronics, SK Hynix, Kioxia, and Seagate will release results this week. Micron Technology already reported revenue jumping 300% to over $40 billion, with guidance for $50 billion in the fourth fiscal quarter. Samsung will publish final numbers after a preliminary report, while SK Hynix’s first earnings since launching US-listed ADRs will be closely watched.
Big Tech companies—Microsoft, Meta Platforms, Amazon, and Apple—also report this week, and their data center spending plans will be critical. Meta, for instance, has a multi-year deal with SanDisk and plans to double computing capacity to 14 gigawatts by 2027. A signal of slowing capital expenditures could further pressure memory stocks and the DRAM ETF, which is heavily concentrated, with the top three names accounting for over 70% of the fund. Technically, DRAM has fallen over 31% from its peak, sits at the 50% Fibonacci retracement, and has formed a head-and-shoulders pattern, leaving it vulnerable to further losses.
