- Chip stocks SanDisk, Micron, and SK Hynix fell in Wednesday's pre-market trading session
- Concerns rise over competition from China's Yangtze Memory Technologies in the NAND market
- YMTC aims to be the largest NAND producer by 2027, raising supply and pricing concerns
Chip stocks SanDisk, Micron Technology and SK Hynix slipped in Wednesday's pre-market trading, even as the broader technology and semiconductor trade remained firm.
Micron was down about 0.8%, SanDisk fell around 1% and SK Hynix slipped 0.9% in pre-market trading. The weakness comes despite South Korea's KOSPI gaining 0.97% during Wednesday's session.
Investors are weighing concerns around rising competition in the NAND market, particularly from China's Yangtze Memory Technologies Corp (YMTC), while also awaiting Nvidia's fiscal second-quarter results for fresh signals on artificial intelligence demand and memory spending.
ALSO READ: Chip Trade Flips: SanDisk, Micron, AMD, Nvidia, SK Hynix Rally Over 3%
The broader chip sector had rebounded on Tuesday as lower Treasury yields and falling oil prices supported risk appetite. The Nasdaq Composite gained 0.66%, while the Philadelphia Semiconductor Index rose 1.4%, with Intel and AMD among the gainers.
YMTC's expansion plans are now emerging as a key concern for memory stocks. The Chinese company aims to become the world's largest NAND producer by the end of 2027 and has filed to raise about $5 billion through a Shanghai IPO. Most of the proceeds are expected to go towards production upgrades and research and development.
YMTC was already the world's third-largest NAND producer in the first quarter, behind Samsung and SK Hynix. Its planned expansion has raised concerns that additional supply could eventually put pressure on NAND prices.
The risk is more pronounced for SanDisk because of its significant exposure to NAND and flash storage. SK Hynix also has NAND operations, but its broader portfolio includes DRAM and high-bandwidth memory. Micron similarly has a diversified memory business.
ALSO READ: Wall Street Under Pressure? Nvidia Q2, Inflation Data Among 3 Factors Weighing On US Stock Futures
Nvidia's earnings later Wednesday will be another key test for the sector. Wall Street expects revenue of about $92.2 billion and adjusted earnings per share of $2.09. Investors will also track the company's outlook and commentary on AI infrastructure spending.
As of the latest available real-time data, SK Hynix was at $159.53, up 2.68%, while its pre-market price was $158.75, down 0.49%. Micron was at $932.97, up 2.48%, with pre-market trading at $928.95, down 0.43%. SanDisk was at $1,480.77, down 0.83%, with its pre-market price at $1,475, down 0.39%.
Despite the near-term pressure, Wall Street maintains a Strong Buy consensus on all three stocks. Micron has the highest projected upside at 66.84%, followed by SK Hynix at 55.46% and SanDisk at 48.68%.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
