Micron stock slides as China fears hammer chip names
Micron shares slid as China chip progress rattled memory stocks, putting July on pace for the stock’s worst month since 2015.
By Frankie Delgado · News Reporter
3 min read
Micron stock China fears intensified Tuesday, with shares of the memory-chip maker dropping 9.6% shortly after the open as worries over Chinese chip supply spread through the sector, according to MarketWatch.
The selloff has left Micron Technology down 29.5% so far in July. MarketWatch reported that the move puts the stock on course for its steepest monthly loss since June 2015, when it fell 32.6%.
The pain was not confined to Micron. Sandisk shares were down 12.4% in morning trading and had lost 50.9% for July to date, putting the stock on track for its worst monthly decline in records going back to its February 2025 separation from Western Digital, according to MarketWatch.
Western Digital and Seagate Technology each fell more than 12% in Tuesday trading, while Dell Technologies dropped more than 13%.
Why is Micron stock falling?
Investors are reacting to signs that China may be advancing its domestic memory-chip and chipmaking-equipment capabilities. The concern is that more local supply could pressure memory-chip pricing and challenge companies that have benefited from strong demand tied to artificial intelligence.
MarketWatch reported that the latest slide followed a strong Shanghai debut Monday for Chinese memory-chip maker ChangXin Memory Technologies, also known as CXMT. The Information also reported Monday that China is making headway on deep-ultraviolet lithography machines, a key class of chipmaking equipment.
According to The Information, a state-backed semiconductor-equipment company has started mass production of DUV systems expected to ship to chipmakers including Semiconductor Manufacturing International Corporation, Hua Hong and CXMT.
Gil Luria, managing director at D.A. Davidson, told MarketWatch that memory-stock valuations tend to move together, so weakness in Korean memory names can pull down U.S.-listed peers. He said in emailed comments that concerns over Chinese technology progress may matter more for Korean companies because most U.S. companies are barred from selling to Chinese customers.
The pressure started overseas. SK Hynix’s American depositary receipts were down 9% after its Korea-listed shares fell 14%. Samsung Electronics dropped 13% in Korean trading, and Japan’s Kioxia Holdings tumbled 18% Tuesday, according to MarketWatch.
What are DUV machines?
DUV machines use light to project tiny circuit patterns onto silicon wafers, which are then processed into memory chips and other semiconductors. They are used for mature chips and memory, and also for some layers in advanced chips that rely on extreme-ultraviolet tools for the most demanding steps.
ASML, based in the Netherlands, is the dominant supplier of both DUV and EUV lithography equipment. DUV shipments to China face tight export controls, while the most advanced EUV systems are banned from sale to Chinese customers, according to MarketWatch.
ASML’s U.S.-listed shares were down 4.7% Tuesday morning.
Nic Puckrin, founder of Coin Bureau and a cross-asset analyst, said in emailed comments that investors fear inexpensive Chinese domestic supply could enter a market that had been running hot for months. He also said profit-taking in chip shares was worsened by concerns over circular financing after Nvidia said it planned to provide OpenAI with a $250 billion backstop as the AI company expands its data-center buildout.
Joseph DeYonker, chief executive of PurePlay ETFs, took a more measured view. He said China’s ability to scale DUV production could help with self-sufficiency in older commodity DRAM, but may matter less for the advanced memory used in data-center AI chips, where Micron has seen demand.
Jefferies analyst Janardan Menon wrote Tuesday that any Chinese lithography system is likely to trail a comparable ASML tool today. He added that U.S.-led limits on advanced chipmaking equipment may be pushing Chinese companies to adopt domestic alternatives faster, especially as lawmakers consider the proposed Multilateral Alignment of Technology Controls on Hardware Act.
This story draws on original reporting from MarketWatch.