Shares of U.S. chipmakers plummeted following the IPO of a Chinese competitor

Shares of memory manufacturers and U.S. chipmakers plummeted during Monday’s trading session following the IPO of Chinese chipmaker ChangXin Memory Technologies (CXMT) on the Shanghai Stock Exchange, according to Barron’s.

After the market opened in the U.S., SK Hynix’s American Depositary Receipts plummeted 8%, SanDisk’s shares fell 11.7%, Western Digital’s dropped 6.5%, and Micron Technology’s declined 5.6%. The Roundhill Memory ETF, which tracks memory manufacturers, lost 4.3%.

Shares of chipmakers also came under pressure: Advanced Micro Devices fell 6.3%, Nvidia 3.5%, Intel 2.9%, and Marvell Technology 5.3%. The VanEck Semiconductor ETF, which tracks the semiconductor sector, lost 4.5% on Monday, while the Philadelphia Semiconductor Index, which comprises 30 semiconductor companies, fell nearly 5%.

Shares of ASML, a Dutch manufacturer of chip lithography equipment, fell 7.8%. The stock price was affected by a report from The Information stating that China has begun producing its own chip-making equipment, which could pose a threat to ASML’s sales.

The decline in semiconductor stocks dragged down the Nasdaq Composite technology index—it jumped more than 1% at the start of trading on Monday, but by the time of publication had lost its gains and was down 0.4%. The S&P 500 also slipped into negative territory after rising in the first few minutes of trading—it is down 0.1%.

On July 27, CXMT’s first day of trading ended with its stock price rising more than fivefold. The largest initial public offering in Asia this year has propelled the chipmaker to the top spot in terms of market capitalization among mainland Chinese companies—despite the recent sell-off in the global technology sector, Reuters notes.

The surge in demand for CXMT shares is driven by a shortage of memory chips for AI. According to the Financial Times, in June, Apple secured permission from the administration of U.S. President Donald Trump to purchase memory chips from ChangXin Memory Technologies, which the Pentagon had blacklisted due to alleged ties to the Chinese People’s Liberation Army. CXMT ranks fourth among the world’s largest manufacturers of DRAM, trailing only South Korea’s SK Hynix and Samsung Electronics, as well as the U.S.-based Micron. CXMT’s growth demonstrates Beijing’s success in building its own artificial intelligence supply chain, one that is shielded from U.S. export restrictions on key technologies, the FT noted.

This article was AI-translated and verified by a human editor