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The CXMT shock: how China’s viable alternatives punch Nvidia, Micron, SK Hynix shares
Advances in chips, chipmaking equipment and AI models disrupt stocks by threatening the edges of existing leaders, investors say
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Zhang Shidongin Shanghai
China’s increasing clout in the global semiconductor supply chain is accelerating the unravelling of the artificial-intelligence trade, as expectations grow that the Asian nation will challenge foreign tech juggernauts by supplying the world with cheaper alternative products.
The US$9.8 billion stock offering of ChangXin Memory Technologies (CXMT) in Shanghai provided the Chinese maker of dynamic random access memory (DRAM) chips with equity funding to finance its expansion of market share home and abroad, sending shares of rivals SK Hynix of South Korea and US-based Micron Technology tumbling.
A media report that China would deliver home-made immersion deep-ultraviolet (DUV) lithography machines to domestic chipmakers this year also sent a shock wave through the market for semiconductor manufacturing equipment, as some investors viewed the breakthrough as a threat to the dominance of Dutch manufacturer ASML.
The episodes add to the unwinding of the frenzy on global AI and technology stocks, which have already been taking a beating amid growing jitters over whether massive capital expenditure will generate cash flows to justify their lofty valuations.
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