Micron closed 2.3% lower on Monday as investors turned to a new name in memory chips: China’s ChangXin Memory Technologies, whose stock popped 466% on its Shanghai debut. Sandisk and SK Hynix’s U.S. receipts fell further, while Nvidia and Broadcom disclosed new memory-supply partnerships with SK Group and Samsung.
Shares of Micron closed 2.3% lower on Monday after falling as much as 7% intraday, as U.S.-listed memory stocks took a sharp turn lower. CXMT’s stock popped 466% in Shanghai on its first trading day.
Sandisk tumbled 11%, while SK Hynix’s American depositary receipts slid 7.5%.
CXMT becomes China’s most valuable listed company
The reception to its initial public offering made CXMT China’s most valuable publicly listed company, according to LSEG data. Its market capitalization stood at about $484 billion. The Hefei-based company makes dynamic random-access memory chips and is the fourth-largest producer of them, behind SK Hynix, Samsung Electronics and Micron.
But without access to ASML’s extreme-ultraviolet lithography technology, CXMT is limited from making the advanced high-bandwidth memory chips that have proved lucrative for its competitors. The Information reported on Monday that China has begun making its own deep-ultraviolet lithography machines, potentially hinting that domestic chip makers there could become more competitive. ASML, which makes both DUV and EUV lithography systems, saw its U.S.-listed shares fall nearly 6% on Monday.
The DRAM shortage CXMT is filling
The focus on silicon-intensive HBM for artificial intelligence has contributed to the broader DRAM shortage, and CXMT has been able to capitalize on that industry dynamic, according to Richard Windsor, founder of research firm Radio Free Mobile. Higher margins from HBM have led the memory leaders to switch capacity toward AI data-center chips from commodity DRAM used in consumer electronics, Windsor said, and that “is the gap that CXMT is filling”.
Yet Windsor expects a big correction for CXMT when DRAM supplies normalize.
Nvidia and Broadcom move to secure memory supply
Nvidia said Friday that it and South Korea’s SK Group had signed letters of intent to expand their strategic collaboration with a more than $500 billion initiative to build AI factories with SK Telecom, and to co-develop future generations of memory chips for AI, including HBM, with SK Hynix. Broadcom announced a memorandum of understanding with Samsung on Saturday to expand their collaboration on advanced memory chips and foundry services, including advanced packaging for AI and networking chips, in a partnership expected to be worth more than $200 billion through 2030.
Bernstein analyst Mark Li wrote that the deals indicate the need for Nvidia and Broadcom to secure memory supply. He said in a note that consensus forecasts for memory annual revenues are for $1.3 trillion in 2027 and 2028.
Nvidia’s stock dropped 5% on Monday, while Broadcom’s rose about 0.3%.
Source: MarketWatch
Trading involves risk.
Risk Disclaimer
