Global memory chip stocks experienced severe volatility. On July 1, shares of the U.S. memory giant Micron Technology plummeted over 10%, SanDisk fell more than 10%, and the Philadelphia Semiconductor Index plunged over 6%. This wave of selling quickly spread to Asian markets, with South Korea's KOSPI index tumbling 7%, and both Samsung Electronics and SK Hynix dropping over 8%.
The market panic stems from a confluence of multiple factors. Firstly, following a nearly 160% gain in the second quarter, concentrated profit-taking pressure emerged, as the memory sector was one of the most concentrated AI-related holdings for institutions, with end-of-quarter portfolio adjustments amplifying the volatility. Secondly, a class-action lawsuit filed in the U.S. accused Micron Technology, Samsung, and SK Hynix of colluding to control traditional DRAM production to inflate prices, raising market concerns over legal risks.
Furthermore, Meta was reported to be planning to launch a cloud infrastructure business, selling AI computing power and model access to external clients. The market interpreted this as a potential signal of a slowdown in AI capital expenditure, prompting a rapid withdrawal of funds from the hardware supply chain. However, several institutions believe this is an overreaction, viewing Meta's move more as an attempt to find commercial outlets for its massive AI spending rather than a fundamental reversal.
The industry's fundamentals have not yet deteriorated fundamentally. Micron Technology previously reported third-quarter results that far exceeded expectations, with revenue soaring 346% year-over-year to $41.46 billion and a gross margin of 84.9%. Management stated that the tight supply-demand situation for HBM is expected to persist beyond 2027. The company has also signed long-term supply agreements worth approximately $22 billion with 16 customers, attempting to lock in contracts to hedge against price decline risks.
Analysts believe this sharp decline resembles a phase of cooling off after a historic rally, rather than the end of the memory chip upcycle. However, risks are rising from accelerated capacity expansion and demand normalization. The memory industry's ability to break the cyclical curse of "boom and bust" will test investors' patience.