Nvidia, Micron, and SK Hynix shares fell up to 5% on Monday, October 12, as China’s CXMT increased competition. The Chinese firm announced a new memory design to boost storage density. Investors got worried about this challenge, causing many tech stocks to drop while the Nasdaq Composite fell 0.46%.
Major US chip stocks came under renewed selling pressure on Monday, October 12, following their recent rally, amid concerns over rising competition from Chinese memory chipmaker ChangXin Memory Technologies (CXMT).
Nvidia, which has been at the forefront of the AI-led rally, saw its shares fall 2% to an intraday low of $224.90. Broadcom, Advanced Micro Devices (AMD), and Intel declined 1.2%, 3.3%, and 3.6%, respectively.
Marvell Technology, Micron, and SK Hynix shed 4.2%, 5%, and 4.3%, respectively. Other major technology stocks, including Amazon and Tesla, also fell by up to 1%.
The weakness dragged the Nasdaq Composite down 0.46% to an intraday low of 27, 240, while S&P 500 and Dow Jones Industrial Average with modest gains.
CXMT's new memory design raises competitive pressure
ChangXin Memory Technologies has reportedly announced significant progress in a new memory-cell design aimed at increasing storage density, an area of innovation also being pursued by the world's largest memory makers, including Samsung Electronics, SK Hynix, and Micron.
CXMT aims to introduce a new server memory product based on the architecture by the end of 2026, company president Cao Kanyu said at an industry event in Shanghai over the weekend.
At the center of the development is the “4F squared” design, in which each memory cell occupies an area equivalent to four times the square of F, with F representing the minimum line width of a semiconductor. The structure enables higher storage density by allowing more cells to fit onto a single chip, according to the South China Morning Post.
CXMT said the core of its 4F-squared design was its proprietary Vertical Surrounding Gate (VSG) transistor. The technology uses a vertical gate architecture to address current leakage while significantly reducing the area occupied by each memory cell and increasing storage density, according to the report.
Since its listing on the Shanghai Stock Exchange's STAR Market in July, CXMT has made several moves to showcase its technological capabilities. Last month, the company said its fifth-generation DRAM manufacturing platform, known as G5, had entered mass production, marking another step towards narrowing the gap with global industry leaders.
Founded in 2016, CXMT said it had been researching the 4F-squared architecture since its inception and had published more than 300 related patent families, surpassing both domestic and overseas peers.
Crude oil tops $106 as geopolitical tensions fuel market jitters
Crude oil prices rose sharply in trade following a deadly attack on Saudi Arabia's airport in Riyadh, while Ukraine said Russia continued to target its energy facilities, CNBC reported. Brent crude futures, the international benchmark, rose 2% to $106.81 a barrel.
Iran-backed Houthi militants in Yemen reportedly attacked King Khalid International Airport in Saudi Arabia's capital, Riyadh, on Saturday, leaving 12 people dead and more than 300 injured in a major escalation, according to the report.
Earlier, US President Donald Trump told reporters that he was considering joining Saudi Arabia in its fight against the Tehran-backed Houthis in Yemen following another deadly attack on Riyadh's international airport. His remarks raised concerns about a further escalation of tensions in the region.