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Memory Stocks Tumble: Is the Peak Already Here?
12 Oct
Summary
- Korean market drops sharply with major chipmakers affected.
- China's CXMT announces significant progress in next-gen memory.
- Goldman Sachs notes memory sector concerns despite strong fundamentals.
The memory chip industry is facing a significant downturn, with major players like Micron and South Korean giants Samsung and SK Hynix experiencing sharp stock drops. This decline follows China's ChangXin Memory Technologies (CXMT) announcing substantial progress on a new 4F² DRAM cell architecture, a technology that industry leaders like Samsung and SK Hynix are still years away from mass-producing. This advancement by CXMT, which could allow it to supply significant DRAM capacity by 2028, is a key factor driving investor concern about future market saturation.
South Korea's stock market, the Kospi, has seen a steep decline, with its technology-heavy Kosdaq index performing even worse. This downturn coincides with the end of record buyback programs by Samsung and SK Hynix, removing a major source of market support. Investors are increasingly worried about the long-term outlook for memory earnings, even as current fundamentals remain exceptionally strong, with companies like Nanya Technology reporting record gross margins. This situation highlights a market shift from chasing growth to valuing companies based on current earnings, with a growing fear that the peak cycle is imminent.
