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🇹🇼 Taiwan /Economy & Trade

US Memory Chip Stocks Plunge Again; Commentator Warns of Unprecedented Speculation

From Liberty Times · () Chinese

Translated from Chinese, summarized and contextualized by DistantNews.

At a glance

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  • Memory chip stocks in the US have seen sharp declines, a phenomenon described as unprecedented and unrelated to fundamentals.
  • This volatility in memory stocks is impacting South Korean, US, and Taiwanese markets, with companies like Samsung and Nanya Technology reporting high profits.
  • Financial commentator Ruan Mu Hua warns that this abnormal market behavior, driven by speculation, is unsustainable and will likely end with a significant turning point.

Global technology giants are facing increasing financial pressure as the memory chip industry shifts from low to high profits. Meta has initiated a move to develop its own "TPP" technology, integrating older memory chips into the latest AI servers, signaling a growing resistance to the "super cycle" of memory chip profits.

This one-day surge and the next-day plunge, a purely speculative market completely unrelated to fundamentals, is a phenomenon that has never occurred before.

— Ruan Mu HuaFinancial commentator Ruan Mu Hua commenting on the volatility of US memory chip stocks.

Samsung Electronics has surpassed Nvidia in second-quarter profits, becoming the world's most profitable company. In Taiwan, DRAM manufacturer Nanya Technology reported a gross profit margin close to 80% in the second quarter, significantly outperforming TSMC. This marks a dramatic turnaround from the previous year when Nanya Technology experienced substantial losses.

Despite these strong corporate earnings, financial commentator Ruan Mu Hua noted on Facebook that US memory chip stocks have collectively fallen sharply. He described the current market as purely speculative, characterized by extreme daily fluctuations unrelated to fundamental economic data, a situation he has never witnessed before.

The problem is that memory stocks have hijacked the Korean stock market, and the volatility of the Korean stock market is transmitted to the US and Taiwanese stock markets.

— Ruan Mu HuaRuan Mu Hua explaining the interconnectedness of global markets through memory chip stocks.

Ruan expressed concern that the volatility of memory chip stocks is disproportionately influencing the South Korean stock market, which in turn is transmitting instability to US and Taiwanese markets. He highlighted that the stock prices of major players like SK Hynix, Samsung, Micron, and Sandisk are now dictating global market movements, an unusual occurrence.

As the saying goes, you see many things if you live long enough. I am curious to see how this market will play out.

— Ruan Mu HuaRuan Mu Hua expressing his anticipation and uncertainty about the future of the memory chip market.

"As the saying goes, you see many things if you live long enough. I am curious to see how this market will play out," Ruan stated. He believes this abnormal situation is unsustainable and will inevitably conclude with a major turning point, though he cannot predict its exact nature.

Regardless, this abnormal situation will definitely end, and I cannot predict how it will end, but I believe there will inevitably be a major turning point to end this abnormal phenomenon.

— Ruan Mu HuaRuan Mu Hua predicting a significant shift in the current abnormal market conditions.
DistantNews Editorial

Originally published by Liberty Times in Chinese. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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