Micron Technology’s stock plunged nearly 6% on July 31, hitting $823 per share and marking a 39% decline from its peak this year. The sharp drop is shaking up the US semiconductor sector, especially as South Korea’s tech giants, Samsung and SK Hynix, ramp up investment in chip production with a combined spending plan estimated between $575 billion and $1.3 trillion.
Surge in South Korean Chip Investments
Driven by a national strategy to dominate the AI chip market, Samsung and SK Hynix are pouring unprecedented amounts into expanding their manufacturing capabilities. This ramp-up comes while demand for high bandwidth memory, key for AI accelerators, continues to outstrip supply a shortage that Micron itself expects to persist until at least 2028.
The capital expenditure concerns caused SK Hynix’s stock to drop 13%, even though Samsung reported an 1800% profit increase last quarter. Meanwhile, the Chinese memory maker CXMT is gaining momentum, with its shares climbing steadily since going public.
Implications for US Memory Makers
Micron holds a market cap around $930 billion and trades at a forward P/E of about 19.8. Wall Street analysts largely remain bullish on the stock despite recent technical signals suggesting short-term weakness. SanDisk, another US memory player, has suffered a 41% slide in the past month, wiping out most of its earlier gains despite still being up 362% year-to-date.
Industry watchers are split on Micron’s outlook. Some projections see shares reaching $1,000 by mid-2028 if pricing power is maintained. Others caution that rising AI infrastructure expenses might force major customers to slow investments before Micron’s new production facilities in Idaho and New York are fully operational.
Micron’s upcoming earnings report on September 29 will offer a clearer picture of how US chipmakers will fare amid the intensifying competition from Samsung, SK Hynix, and CXMT as they race to bridge capacity gaps.
This content is for informational purposes only and does not constitute financial advice.
