It fell more than 20% in several weeks! The underlying logic of memory chips faces revaluation

Kuai Technology reported on July 12 that according to media reports, SK Hynix went public in the United States, which once again ignited the capital market’s attention to the memory chip sector of the U.S. stock market. Since the beginning of this year, the sector first experienced a strong rise, and then suffered a collective correction. It also showed violent fluctuations this week. Industry insiders pointed out that the memory chip industry has long followed a unique cyclical rhythm - whenever the economy rises, manufacturers simultaneously expand production, resulting in the concentrated release of new production capacity, price collapse, and the entire industry falling into losses. Subsequently, manufacturers were forced to reduce capital expenditures. When demand picks up, the boom will come again. This cycle of "production expansion-excess-production reduction-recovery" constitutes a cyclical fate that is difficult to escape from in the storage industry. After U.S. memory chip stocks hit a high in late June, they were hit by news such as Meta's sale of computing power. The market's concerns about excess computing power have intensified, and the sector has suffered a collective correction. Data shows that the stock prices of leading companies such as SanDisk, Micron Technology, Seagate Technology, and Western Digital have all fallen by more than 20% in the past few weeks. Analysts pointed out that the current underlying logic supporting storage demand is facing re-examination, and the core variable is whether the technical gap between major AI models will continue to narrow. If the gap narrows, dependence on homogeneous computing hardware will decrease, which may reshape the growth structure of storage demand. At the same time, the memory chip industry is undergoing a profound business model transformation. In the past, storage products were closer to commodity attributes, with prices following market trends and supply contracts mostly on a quarterly or annual basis. Nowadays, in order to ensure the critical supply of AI data centers, cloud vendors are increasingly signing long-term agreements with storage manufacturers for three to five years, clarifying price ranges, minimum purchase quantities, and customer deposit terms. This change is pushing storage from a "cyclical product" to a "strategic material" positioning, and will also affect the profitability stability and valuation logic of the sector in the medium to long term.