I’ve said many times this year that the Chinese tech sector was coming after US tech market share and its heady profit margins, both on the hardware and software (AI models) side. Another dose of reality hit this week, notes Peter Boockvar, editor of The Boock Report.
In case you didn’t see the story, I’ll quote here from the South China Morning Post: “Chinese memory chip giant ChangXin Memory Technologies (CXMT) has reported ‘key progress’ on a new cell architecture to boost memory density, an innovation competitors such as Samsung Electronics and SK Hynix Inc. (SKHY) are also working on.”
MU (Blue), SKHY (Red) - 1-Mo. % Change
Source: TradingView
I’ll add: More memory density on each chip, less need for memory chips. In response, Micron Technology Inc. (MU) traded down by 3.9%. Samsung was lower by 11% over just two trading days and SK Hynix traded down by 14%. I’ll argue that it’s no coincidence that Micron stock topped out just weeks before CXMT went public in July.
At an industrial event in Shanghai, the president of CXMT said they planned to roll this out by the end of 2026. Keep your eye on Yangtze Memory Technologies, a company in the NAND storage business. The firm is expected to go public either late 2026 or early 2027.
Regarding AI selling, also throw in the postponed data center IPO of Firmus last week. The Australian company pulled its offering. Now, Airtrunk is doing the same. Airtrunk is a Singapore-based company developing data centers in Asia and the Middle East. The Wall Street Journal reported that the company cited “market volatility and uncertainty over where US interest rates are headed.” The company is backed by Blackstone Inc. (BX).