Memory Stocks Plunge on China Competition Fears and 2029 Oversupply Speculation; Analysts Question CXMT Threat and Note LTA Impact

Memory chip stocks suffered significant losses this week, with SK Hynix, Samsung Electronics, and Micron Technology among the hardest-hit names in the broader tech sell-off. Over the past five days, SK Hynix plunged 26%, Samsung tanked 22%, and Micron dropped around 11%. This decline was driven by two main factors: fears that Chinese competitor ChangXin Memory Technologies (CXMT) could capture global market share through new architectural breakthroughs, and speculation about a potential oversupply of memory chips by 2029.

CXMT recently announced plans to roll out a server memory product based on a new architecture designed to increase storage density. However, experts like Ben Barringer, global head of technology research at Quilter Cheviot, and Kevin Cassidy, senior research analyst at Rosenblatt Securities, have questioned the immediate impact. Barringer noted that architectural changes face yield challenges, where low yields result in significant waste. Cassidy stated that developments at CXMT are unlikely to swing the supply-demand equation.

Additional pressure came from an opinion column in Maeil Business Newspaper, which cited Professor Hwang from Seoul National University and Ahn Ki-hyun, executive director of the Korea Semiconductor Industry Association, predicting a "flood of new supply" turning the market into a "red ocean" by 2029 and ending the supercycle by 2030. Elon Musk also responded on X, stating that China "will be making a LOT of RAM in 2028."

Despite these long-term forecasts, many analysts argue the current market is in a "New Normal." Jeongku Choi, senior research analyst at Counterpoint Research, pointed out that suppliers and buyers now enter into 3- to 5-year Long-Term Agreements (LTAs) with upfront payments and price limits. Consequently, even if a down cycle occurs, it is not expected to show the same sharp declines seen in the past. For instance, Counterpoint predicts DRAM prices will fall around 23% in 2028 compared to 2027, but remain up approximately 230% compared to 2025 levels.