Micron Technology NASDAQ:MU, a U.S. memory chipmaker, is coming under fresh pressure after Michael Burry (Trades, Portfolio) disclosed a short position and pushed back against the idea that memory chips have entered a lasting supercycle. Burry argued that Micron remains deeply cyclical, with the stock often rising too far when conditions are strong and falling too sharply when sentiment weakens.
Samsung Electronics (SSNLF), South Korea's technology giant, SK Hynix (HXSCL), a South Korean memory-chip producer, and Micron still control roughly 90% of the global DRAM market, but recent trading suggests investors remain highly sensitive to supply-demand risks. After Micron reported strong earnings in late June, enthusiasm faded quickly, with SK Hynix shares falling as much as 25% from last month's peak and Micron's valuation slipping from 11 times forward earnings to seven times last week.
The bigger concern is that aggressive capacity expansion could possibly shorten the current memory shortage. South Korea has unveiled at least 1.35 trillion won in projects, including new Samsung and SK Hynix chip plants, while China's ChangXin Memory Technologies, a local DRAM producer, is preparing a listing that could raise at least 29.5 billion yuan. For investors, the risk is that AI demand remains powerful, but new supply from Korea and China may still pressure memory-chip valuations.