Western Digital (WDC) shares tumbled 5.00% in a sharp 24-hour selloff, extending losses across the memory and storage sector amid a confluence of negative catalysts rattling investor sentiment.

The decline was fueled by dual headwinds from China: the blockbuster Shanghai trading debut of Chinese memory chip maker ChangXin Memory Technologies (CXMT), whose shares surged 466% and reached a market capitalization of $484 billion, intensifying competitive fears for established NAND players. Adding to the pressure, reports emerged that a state-backed Chinese company has begun mass-producing immersion deep ultraviolet lithography machines, a critical technology for chip manufacturing that threatens to erode the moat of Western equipment suppliers and signals China's accelerating self-sufficiency push in semiconductors.

Compounding the sector-wide rout, Morgan Stanley warned that memory contract prices may peak in the fourth quarter, suggesting the AI-driven storage boom is approaching an inflection point. Meanwhile, bearish rumors circulated that SanDisk had signed a low-price long-term supply agreement with Meta, and cloud vendors were reportedly pressuring QLC enterprise SSD pricing downward. These developments reinforced fears of NAND flash pricing normalization and a potential supply glut, triggering profit-taking across storage names including Micron Technology and SK Hynix, which also declined sharply in the session.