Micron Plunges 8.9%, Leading New Wave of Chip Stock Sell-Off

According to The Barron's, memory chip manufacturer Micron (MU-US) was one of the worst-performing stocks on Tuesday (28th), plunging despite having relatively avoided the worst sell-off in the previous trading session. This catch-up decline is not a positive sign.

Micron's stock closed down 8.9% on Tuesday, while Sandisk (SNDK-US), Western Digital (WDC-US), and Advanced Micro Devices (AMD-US) fell approximately 14.3%, 6.9%, and 8.2% respectively. Despite the chaos in chip stocks, the Nasdaq Composite Index was nearly flat.

South Korea's KOSPI index plummeted 11% on Tuesday, further damaging market sentiment. This decline reflects the previous day's sharp drop in U.S. stocks and set a pessimistic tone for trading that day.

Micron had fallen 2.3% on Monday, memory storage company Sandisk plunged 11%, and AMD also dropped over 5%. But by Tuesday, the decline became more widespread, with the Philadelphia Semiconductor Index falling 4.5%.

At the start of the week, China was one of the key factors triggering market volatility. On Monday, reports emerged that a Chinese company had begun producing immersion deep ultraviolet (Immersion DUV) lithography machines—critical equipment for chip manufacturing, currently dominated by Dutch firm ASML. Upon this news, chip stocks immediately fell.

Earlier, Chinese memory chip manufacturer ChangXin Memory Technologies (CXMT) listed in Shanghai and saw its shares surge 466% on its first trading day, briefly reaching a market capitalization of $484 billion, making it the most valuable company in China.

But even this hot AI-related new stock has started to cool down. CXMT closed 4% lower on Tuesday, its second trading day.

For investors hoping for a market rebound, this brought yet another painful blow.