Memory chip stocks face continued sell-off, with factors such as Chinese competitors' technological breakthroughs and the end of buybacks intensifying concerns that the cycle has peaked.
BlockBeats news, October 13 — The memory chip sector continued to face selling pressure. According to BIT (bit.com) market data, Micron closed down 3.88% on Monday, while SanDisk fell 5.97%, with both stocks declining in six of the past seven trading sessions. Micron has now fallen nearly 20% from its June high, nearing a technical bear market.
In the South Korean market, SK Hynix plunged 9% today, while Samsung Electronics extended its decline to 7%. This round of correction was mainly driven by the withdrawal of buyback support and technological breakthroughs by Chinese competitors.
Foreign investors net sold Korean stocks for a fifth consecutive trading session, with the tech sector seeing approximately $1.3 billion in net selling on a single day, of which SK Hynix and Samsung faced sell-offs of $782 million and $415 million, respectively.
Meanwhile, the combined buyback program of Samsung and SK Hynix worth approximately 55 trillion Korean won, equivalent to about $40 billion, ended several weeks ahead of schedule, with Samsung's buyback actually terminating on October 6. After buyback support withdrew, the KOSPI has fallen over 10% cumulatively. Although retail investors stepped in against the trend, Goldman Sachs noted that their net buying scale is declining.
On the competition front, ChangXin Technology announced key progress in developing the 4F² architecture for next-generation DRAM, and is expected to launch DDR5 RDIMM server memory products integrating this architecture and hybrid bonding technology by year-end. Compared to the mainstream 6F² architecture, 4F² can theoretically reduce cell area by about one-third and increase memory density by approximately 50% at the same wafer area and process node, heightening market concerns about future competition and supply expansion.
Additionally, Broadcom's CEO's remarks that AI stock investing has gambling-like characteristics further exacerbated market concerns. Ha SeokKeun, Chief Investment Officer at Eugene Asset Management, said: "The market is uncertain whether this upcycle can persist through 2028 and beyond, which appears to be weighing on the valuations and share prices of Korean chipmakers."
The memory industry's fundamentals remain strong recently, but investors have begun pricing in peak earnings risk in advance, worried that simultaneous production ramp-ups of Chinese memory capacity and new Korean fabs in 2027 to 2028 could reverse the supply-demand dynamics. Goldman Sachs' trading desk believes that peak earnings concerns are weighing on valuations, and there is currently a lack of sufficient catalysts to drive further re-rating.
