Memory chips have entered a bear market this month, dragging down a corner of the semiconductor industry that is supposed to be riding the artificial intelligence boom.
According to The Motley Fool, shares of Micron Technology were trading roughly 30% below their 52-week high of $1,255, after memory stocks pulled the broader chip sector into bear-market territory. A bear market typically means a drop of 20% or more from a recent peak.
The sell-off is striking because demand for the chips has not gone away. The Financial Times reports that investors are split: some worry that the industry's massive plans to expand production capacity could lead to oversupply and a fresh boom-and-bust cycle, while others believe AI demand is strong enough to finally break that cycle for good.
Memory chips have long been famous for their swings — prices soar when supply is tight, then crash when manufacturers over-build. That history is what makes today's expansion plans a source of both optimism and anxiety.
Industry leaders are leaning toward the optimistic view. SK Group Chair Chey Tae-won told The Korea Herald that a memory shortage has already prompted governments to step in to protect their domestic industries, and he argued that SK Hynix needs to expand capacity even faster. Chey said he expects memory demand to far exceed supply through 2027, even accounting for the planned capacity increases.
That leaves a notable gap between how the stock market and how some executives see the same industry: falling share prices on one side, forecasts of years-long shortages on the other.
Why it matters: memory chips are essential hardware for the data centers powering AI, so whether their price cycle is truly "different this time" will shape the cost and pace of the entire AI build-out.