US-listed memory chip leader has fallen more than 20% over the past few weeks, and the underlying thesis is facing a reassessment

ME AI In [the] message, industry insiders say that in the history of the memory chip industry, whenever there is a boom, manufacturers often expand capacity in sync, leading to newly added capacity being released in a concentrated manner and causing prices to plunge, pushing the whole industry into losses; afterward, manufacturers collectively cut back on capital expenditure, and when demand picks up again, another boom arrives—this cycle forms the industry’s distinctive seasonality.

Since memory chip stocks in the U.S. stock market hit their highs in late June, news such as Meta selling computing power has triggered market concerns about excess compute capacity, and memory chip stocks have seen a broad pullback. Data shows that over the past few weeks, shares of industry leaders such as SanDisk, Micron Technology, Seagate Technology, and Western Digital have all fallen by more than 20%.

Analysts point out that the underlying industry logic supporting memory chip demand is currently facing a reassessment, and the key variable is whether the technological gap among each company’s AI large models will continue to narrow. Analysts also say that the memory chip industry is undergoing a deep change in its business model: in the past, storage was more like a commodity, with pricing set by market conditions and many contracts signed on a quarterly or annual basis; now, to ensure critical supply, cloud providers and AI data centers are increasingly signing long-term supply agreements with original manufacturers—typically three to five years—featuring price ranges, minimum purchase quantities, and customer deposits. (Source: BlockBeats)