Memory-chip stocks suffered a sharp sell-off on Monday, extending recent losses, after Reuters reported that China’s largest DRAM manufacturer, ChangXin Memory Technologies (CXMT), is considering building a second fabrication plant in Beijing. The news reignited supply-glut fears that have periodically weighed on the sector despite strong AI-driven demand.
The Roundhill Memory ETF (DRAM) had already tumbled 33% from its year-to-date high, closing Friday at $50. On Monday, Micron Technology and SK Hynix each fell about 6% in early trading before paring losses. SanDisk slipped roughly 2.5% before turning green, while storage firms Seagate Technology and Western Digital posted steeper declines of more than 7%. The sell-off occurred even as the broader U.S. stock market rallied on easing geopolitical tensions.
According to the Reuters report, CXMT is in financing discussions with a Beijing government-backed technology hub to support a new memory-chip facility. The company, now the world’s fourth-largest DRAM supplier with an 8% global market share, has already been expanding aggressively—projects in Shanghai and Hefei could double its capacity to over 600,000 wafers per month. Its record $8.6 billion IPO last month added fresh capital for these ambitions.
Despite investor jitters, analysts maintain that a meaningful competitive threat remains distant. U.S.-led export restrictions block Chinese firms from accessing advanced extreme ultraviolet (EUV) lithography systems, forcing CXMT to use roughly 30% more wafers to produce the same memory. MST Financial’s David Gibson noted that “listing doesn’t change the outlook for the big three or the industry as demand continues to exceed supply for everyone.” TrendForce’s Ellie Wang also highlighted that CXMT’s products are concentrated in mainstream applications, not the high-performance memory required for AI servers, leaving incumbents like Micron, Samsung, and SK Hynix with a strong advantage in the AI infrastructure market.
This week, attention also turns to earnings from SanDisk and Western Digital, both set to report on Wednesday. Analysts expect SanDisk’s revenue to jump 341% year-over-year to $8.4 billion, with EPS of $34.5, while Western Digital’s revenue is forecast to rise 41% to $3.7 billion and EPS to nearly double to $3.3. Strong results and guidance could offer a much-needed catalyst for these beaten-down stocks.
While the memory chip sector is under pressure, the turmoil has had no direct impact on cryptocurrency markets. Crypto prices and blockchain projects remain driven by their own fundamentals, unaffected by the semiconductor supply dynamics.
