Chip stocks saw their declines widen during the afternoon session. At the time of writing, SHANGHAI FUDAN (01385) fell 8.25% to HK$34.94; HUA HONG SEMI (01347) dropped 5.14% to HK$79.35; SMIC (00981) decreased 5.01% to HK$50.20; and GIGADEVICE (03986) declined 4.86% to HK$348.20.

Market sentiment was influenced by Nvidia's recent introduction of the BlueField-4 STX storage architecture and Google's release of its TurboQuant AI memory compression technology. These developments have sparked discussions on whether AI systems can achieve the same or greater levels of work using less memory.

Furthermore, since the memory price surge began in the fourth quarter of last year, purchasing demand from many individual consumers has been suppressed. Recently, spot traders have been looking to liquidate inventory and realize profits, leading to increased selling of lower-end DDR4 memory modules. This has further impacted and depressed the channel market, with DDR4 modules leading the price decline.

It is important to note that Wall Street and industry research institutions generally emphasize that the spot market is primarily composed of PCs and consumer electronics, which account for at most a low single-digit percentage of total market transactions. Recent reports from Goldman Sachs and South Korea's Daishin Securities both indicate that the enterprise contract market remains unaffected. Demand for server memory from major cloud service providers continues to be strong, and the fundamental supply-demand dynamics have not undergone a substantive reversal.