SK Hynix has dropped below its IPO price, SanDisk's market capitalization has halved, and the listing of China's leading DRAM player is reshaping the global industry landscape.

The explosive performance of CXMT, China's leading memory chip firm, on its first day of trading on the A-share market, is emerging as a new variable reshaping the global memory chip sector.

During Monday's U.S. trading session, memory chip stocks plummeted, becoming the biggest drag on the broader market. SanDisk (SNDK) dropped more than 10% intraday, hitting a session low of roughly 14.6% in early trading, marking a cumulative 47% decline from its all-time high set on June 22, with nearly $170 billion in market value erased in the past month. SK Hynix's ADR (SKHY) fell around 10% intraday, while Western Digital (WDC) and Seagate Technology (STX) dropped over 9% and 8% respectively, and Micron Technology (MU) slid more than 7% at one point.

By market close, SanDisk, SK Hynix ADR, Western Digital, Seagate Technology, and Micron posted declines of roughly 11%, 7.5%, 4.2%, 4.1%, and 2.3% respectively. SK Hynix closed below its IPO offering price for the first time since its U.S. listing on July 10, finishing 4% below the issue price.

At the early session low, the Philadelphia Semiconductor Index, which tracks the overall performance of chip stocks, fell roughly 5%, underperforming the three major U.S. stock indices by a wide margin, before closing down 2.2%. The S&P 500 and Nasdaq dipped around 0.4% and 0.8% respectively at their session lows, while the Dow Jones maintained gains throughout the day.

Market participants widely pointed to CXMT, which listed on the Shanghai Stock Exchange's STAR Market that day. China's largest DRAM maker saw its share price surge more than 460% on its debut, with market capitalization exceeding 3 trillion yuan, making it the new largest company by market value on the A-share market, and prompting global investors to reassess the competitive landscape of the DRAM industry in the coming years.

Listing of China's DRAM Leader Triggers Global Memory Sector Reassessment

Regarding the sharp drop in U.S.-listed memory chip stocks this Monday, multiple foreign media outlets argue that market concerns do not stem from CXMT's short-term performance, but from potential shifts in the global DRAM supply landscape in the future.

Analysts note that CXMT's completion of Asia's largest IPO this year means the company has secured more abundant capital support, which is expected to enhance its capacity for future production expansion, technological R&D, and advancement into high-end AI memory segments such as HBM. For global leading memory chip firms that have already seen substantial share price gains, this indicates rising long-term competitive pressure.

Some commentators point out that the market fears that with CXMT's financing completed, new DRAM supply may be released at an accelerated pace in the future, weakening current market optimism about sustained rises in memory prices. Meanwhile, memory stocks including Micron, SK Hynix, and SanDisk have experienced steep run-ups previously, and against the backdrop of high valuations, any change in the competitive landscape can easily trigger profit-taking.

Other commentators argue that this pullback largely reflects a market repricing. While AI-driven demand for HBM remains strong, investors are beginning to rethink: if Chinese manufacturers continue to expand their production capacity and technological capabilities, will the traditional DRAM business enter a phase of intensified competition earlier than expected, thereby squeezing industry profit margins?

However, many analysts believe the market reaction may involve a certain degree of overinterpretation.

At present, CXMT's products are still primarily concentrated in traditional DRAM segments such as DDR4 and DDR5, while Micron, SK Hynix, and Samsung currently generate their fastest profit growth from AI memory products like HBM. Constrained by U.S. export restrictions, CXMT still faces high technical barriers to entering the high-end HBM market in the short term, meaning the global AI memory market structure is unlikely to undergo fundamental changes anytime soon.

CXMT's Skyrocketing Debut: Capital Markets Bet on "China's Memory Industry"

CXMT's IPO itself has drawn widespread global attention.

The company raised approximately 57.9 billion yuan (about $8.6 billion) in this offering, setting a new record for the largest IPO fundraising scale in Asia this year. On its listing day this Monday, its share price closed 465.82% higher than its offering price, with a total market value reaching 3.28 trillion yuan, surpassing Industrial and Commercial Bank of China to become the largest company by market capitalization on the A-share market, equivalent to twice the market value of Kweichow Moutai.

Throughout Monday, CXMT's trading volume exceeded 1400 billion yuan, making it the first stock in A-share history to break 1000 billion yuan in single-day trading turnover.

Public information shows that CXMT, founded in 2016, is China's largest DRAM chip manufacturer and a key representative enterprise that has achieved independent R&D and mass production of DRAM in China. Currently, the company's products cover multiple fields including consumer electronics, PCs, servers, and automotive electronics, while continuously advancing R&D of new products such as DDR5.

Domestic media generally believe that CXMT's listing not only marks a new milestone for China's semiconductor industry, but also indicates that the capital market is granting higher valuation premiums to domestic high-end manufacturing and "hard technology". The market expects the raised funds to further support the R&D of advanced processes, expand production capacity, and improve the domestic memory industry chain.

In the AI Era, HBM Remains the Decisive Factor for Market Success

Nevertheless, from the perspective of the global competitive landscape, most institutions still believe that the leading positions of Micron, SK Hynix, and Samsung in the AI memory sector are difficult to shake in the short term.

The current explosive demand for AI servers has made HBM one of the most in-demand semiconductor products worldwide. Micron and SK Hynix almost monopolize HBM supply for AI chip manufacturers such as NVIDIA, and their related businesses are the core driving force behind their rapid profit growth.

Therefore, many analysts argue that Monday's plunge in memory stocks is more of a sentiment-driven valuation adjustment, rather than a fundamental inflection point for the industry. With the continuous advancement of AI infrastructure construction, demand for high-end memory is still expected to maintain rapid growth.

Bernstein analyst Mark Li even believes that the sector's pullback that day has created new layout opportunities. He predicts that by 2027 to 2028, global memory chip market revenue is still expected to exceed $1.3 trillion, as data center construction in the AI era will continue to support growing demand for DRAM and HBM.

This article is from the WeChat official account "Wall Street CN", author: Li Dan, published with authorization from 36Kr.