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Qabil Ashirov

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Shares of major memory chip manufacturers declined after reports that China’s ChangXin Memory Technologies (CXMT) had made progress in developing a new memory chip, intensifying competition in the global semiconductor industry.

CXMT plans to introduce a new memory chip based on a 4F² architecture by the end of the year. The design allows manufacturers to pack more memory into the same chip area. The product could become one of the highest-capacity memory chips on the market, increasing competitive pressure on established manufacturers.

Following the news, shares of major industry suppliers fell. Micron and SK Hynix’s US depositary receipts declined by 4.5%, while Samsung shares closed 4.4% lower in South Korea.

Investors have been closely monitoring CXMT’s ambitions. In July, the company’s shares reportedly surged 466% on the first day of its initial public offering, bringing its market capitalization to approximately $500 billion. At Monday’s market close, CXMT remained China’s most valuable company, ahead of Tencent, China Construction Bank and Agricultural Bank of China, according to the report.

Memory chip manufacturers have benefited for several years from the rapid construction of artificial intelligence data centers. Demand for chips has exceeded suppliers’ production capacity, supporting high prices and strong profitability.

Micron, for example, expects revenue of approximately $61.5 billion for the first quarter of fiscal 2027, ending in November. Analysts had forecast average revenue of $56.8 billion.

The company also projects adjusted earnings of $38.15 per share, above the market consensus of $36.02. Micron is expanding production capacity and pursuing long-term contracts to reduce the cyclical nature of its business.

However, intensifying competition comes as Wall Street investors increasingly question the sustainability of the AI investment boom. Rising debt burdens and financing costs are adding to concerns.

Strong financial results are also becoming less reliable as a catalyst for share price gains. A week earlier, Samsung shares came under selling pressure despite the company reporting record quarterly revenue and profit.