Memory chip bear market and AI demand

PARAGRAPH 1 --- What happened: Memory chip stocks, including Micron, SK Hynix, and SanDisk, have entered a bear market, with shares down significantly from their peaks. Micron's stock is trading around 30% below its 52-week high, despite reporting a quadrupled fiscal third-quarter revenue. The South Korean KOSPI index plunged 29% in a month, with chip stocks leading the decline.

PARAGRAPH 2 --- Market impact: The bearish sentiment is driven by concerns over expanding supply in the memory chip market, which has erased significant gains from the AI memory boom. The selloff has spread to other semiconductor stocks, including Nvidia and TSMC, as investors reassess AI infrastructure valuations. Companies with strong fundamentals in the storage and memory sector are also experiencing significant price declines.

PARAGRAPH 3 --- What to watch next: Investors should closely monitor Micron's fiscal fourth-quarter earnings, scheduled for late June, to gauge the company's outlook amidst the market downturn. Additionally, the progress of China's expanding DUV lithography capabilities and the evolution of circular AI financing will be crucial factors influencing the narrative moving forward.