Changxin Technology (688825.SH) listing raises competition concerns, US stock memory chip sector sold off SK Hynix (SKHY.US) falls below issue price

The Zhitong Finance App learned that the global memory chip sector experienced a sharp sell-off on Monday due to multiple factors such as rising concerns about investment in artificial intelligence (AI) infrastructure and the strong listing of memory chip manufacturer Changxin Storage's parent company Changxin Technology (688825.SH). The SKHY.US (SKHY.US) American Depositary Receipt fell below the issue price in less than a month, and memory chip stocks such as Micron Technology (MU.US) and SanDisk (SNDK.US) declined simultaneously.

On Monday, SK Hynix ADR fell 10%, hitting a low of 139.01 US dollars, falling below the issue price of 149 US dollars at the time of the July 9 IPO, and finally closed at 143.02 US dollars, which is about 4% lower than the issue price. The IPO raised US$26.5 billion, making it one of the largest IPOs in the world this year.

Meanwhile, the Philadelphia Semiconductor Index continued its recent decline and closed at its lowest level since May 19, indicating that the market continued to withdraw from the AI semiconductor sector, which had previously seen large gains.

Analysts believe that this round of adjustments is mainly affected by growing concerns about AI infrastructure investment.

Earlier, it was reported that Nvidia (NVDA.US) is negotiating AI infrastructure projects with a total scale of more than 750 billion US dollars and plans to provide financing support for data center projects related to OpenAI, raising market concerns about the continued expansion of capital expenditure in the AI industry chain. Affected by this, Nvidia's credit default swap price recorded its biggest one-day increase on record on Monday, and investors' risk appetite has clearly cooled down.

Notably, just as stock prices plummeted, SK Hynix announced that it will cooperate with Nvidia to build an AI data center with a total size of more than 2 gigawatts (GW) in South Korea, which is equivalent to meeting the electricity needs of about 1.5 million households. Among them, the first “AI Factory” (AI Factory) built by SK Telecom is expected to be put into operation next year.

However, this positive news failed to boost stock prices, and the market's focus is still on the AI industry's rising capital investment and future return prospects.

Meanwhile, Changxin Technology landed on the Shanghai Stock Exchange on Monday, further increasing market concerns about competition in the industry. The stock price surged 466% on the first day of listing, and the market capitalization quickly rose to about 484 billion US dollars. The company specializes in DRAM memory chips and is in direct competition with SK Hynix, Micron and Samsung Electronics.

Meanwhile, Changjiang Storage, another domestic memory chip manufacturer, is also expected to launch an IPO later this year. Its main NAND Flash products will compete with Micron, SanDisk, and SK Hynix. Dragged down by market sentiment, Micron closed down 2.25% on Monday, while SanDisk's decline reached 11.02%.