Micron shares fell on Thursday, ending their recent rebound from a multiweek slump. New research also pointed to a fast-growing Chinese competitor in the memory chip market.
Shares dropped 0.3% in premarket trading, taking back some of Wednesday’s nearly 5% rally. The stock is still up about 190% for the year, but it has lost almost 25% since late June as investors worry about whether current chip prices can last.
Demand for AI-related memory hardware from Micron and companies like SK Hynix is still strong, but new research shows growing competition. A Wednesday report from Counterpoint Research said Micron fell behind other suppliers in the NAND memory chip market in the second quarter. This segment makes up about a quarter of Micron’s total revenue.
The research firm said AI is now the main reason for higher demand, with usage rising as the industry moves from training AI models to using them for inference. Samsung kept its lead with a 25% share of shipments, followed by SK Hynix at 22%. Yangtze Memory Technologies (YMTC) moved up to third place with a 14% share, just ahead of Kioxia, while Micron was behind these companies. Yangtze Memory Technologies (YMTC) is a name investors may need to watch more closely as a potential new competitive threat from China. The company remains somewhat difficult for international investors to access and has been on the U.S. Commerce Department’s Entity List, which targets foreign companies viewed as posing risks to U.S. interests, since 2022. YMTC is reportedly preparing for a public listing in mainland China, though it has not disclosed a timeline.
Even though YMTC shipped more products, Micron still did better in terms of revenue. Counterpoint Research explained that shipping more units does not always mean higher revenue. YMTC was only fifth in revenue, even though it was third in shipments, because it sells more lower-priced consumer products instead of higher-margin enterprise solid-state drives used in data centers. This put YMTC behind both Micron and Kioxia in revenue.
The research firm also said that the Chinese company plans to focus more on enterprise storage products in the second half of the year. This move aims to strengthen its position among the top global NAND suppliers, helped by better access to funding.
