SK Hynix (SKHY) and Samsung make almost 80% of the world's AI memory. That's why Micron (MU) and US chip stocks crashed again (July 16, 2026)

By Dennis Singleton · Markets Writer · July 16, 2026

Key points

Chip stocks fell hard Thursday (SOXX down 4.5% by early afternoon) even after TSMC posted its best quarter in years.
Memory names got hit hardest: Western Digital down 9.8%, SanDisk 10.7%, SK Hynix's Nasdaq shares 8.9%, Micron 5.7%.
Samsung and SK Hynix alone make close to 80% of the world's HBM supply, the memory type every AI chip depends on.
China's ChangXin Memory Technologies priced an $85.7 billion IPO the same day, a real fourth DRAM competitor emerging just as analysts split on whether chip stocks have hit a bottom.

The Kospi crashed again this morning, and Korea rolled out a debt hotline for leveraged traders hours before its market even opened. By the time US trading started, the same story had crossed the ocean. Chip stocks sold off hard Thursday, even after TSMC (TSM) posted one of its best quarters in years. The reason those two events are connected is not complicated once you see it: two Korean companies make almost all of the memory that goes into an AI chip, and both of them are dealing with real trouble at home right now.

Why chip stocks fell on July 16

The semiconductor sector's benchmark ETF, SOXX, was down 4.5% by early Thursday afternoon, a far sharper drop than the broader market, continuing Wednesday's rotation out of chip stocks. The S&P 500 and the chip-heavy Nasdaq both lagged. The Dow actually held higher, lifted by earnings beats from UnitedHealth and Abbott Laboratories that pulled money into health care instead. We covered that rotation in detail here.

Memory names took the worst of it. Western Digital (WDC) was down 9.8%. SanDisk (SNDK) was down 10.7%. SK Hynix's Nasdaq-listed shares (SKHY) were down 8.9%. Micron (MU) was down 5.7%, and Seagate (STX) was down 8.9%. TSMC itself, despite record profit and a raised spending forecast, was down about 2.9%, all as of early afternoon trading. None of this happened because of bad news from any of these specific companies. The entire memory trade has been unwinding for weeks, and Thursday added another leg down.

Two Korean companies, one global bottleneck

Here is the part that doesn't get explained enough. Samsung Electronics and SK Hynix are not just two large chip companies among many. In ordinary DRAM, the standard memory in every computer and phone, Samsung holds about 38% of the global market and SK Hynix holds about 29%, together closer to two-thirds of the entire supply. In HBM, the specific high-bandwidth memory that sits inside every AI accelerator now, the concentration is even tighter: SK Hynix holds about 62%, Samsung about 17%. Add those together and two Korean companies control close to 80% of the world's supply of the memory type AI chips actually need. We explained how HBM actually works here, if that part is new to you.

There are exactly three companies on the planet that can manufacture HBM at meaningful scale. Two of them are Korean. Making HBM is also physically expensive in a way normal memory is not: producing one HBM wafer uses roughly the same manufacturing capacity as three ordinary DRAM wafers, so every HBM order pulls capacity away from the regular memory supply too. HBM's share of total DRAM industry revenue is expected to reach 41% this year, up from just 8% in 2023. That is how fast this one product has come to dominate the whole memory business, and how much of it runs through two companies in one country.

This is why a bad week in Seoul does not stay in Seoul. Samsung and SK Hynix are absorbing forced selling, margin calls and a surprise interest rate hike at home, all covered in our reporting from Korea this morning. The effect does not stop at Korea's border. Every US company that buys their memory, sells competing memory, or trades on the assumption that memory stays scarce and expensive feels it the same day.

Korea's own crisis is not finished

President Lee Jae-myung called the Korean market "quite unstable" on Wednesday and pointed directly at leveraged ETFs tracking Samsung and SK Hynix. The Bank of Korea then raised interest rates in a surprise move Thursday, and financial regulators were expected to meet the same day to discuss tighter rules on those leveraged funds. Regulators there are also rolling out a debt hotline after more than 320,000 accounts were forcibly liquidated this month. None of that is resolved yet. The mechanics behind why Korea's market moves this violently are here, and they are still very much in play.

So when US traders ask why a stock like Micron or Western Digital keeps falling on days with no company-specific news, part of the answer is sitting in a Seoul trading session that opened while most of America was still asleep.

Are chip stocks at the bottom?

No one can answer that with real certainty, and any headline that claims otherwise is overselling it. Here is the case on both sides.

The bull case rests on real numbers. TSMC's quarter was not a soft beat. Record profit, a raised full-year outlook, and a capex increase most analysts did not expect. JPMorgan strategist Mislav Matejka told clients the semiconductor upcycle is "not peaking anytime soon," and much of Wall Street is treating this stretch as a mid-cycle reset rather than the start of something worse, still holding full-year price targets on names like Nvidia (NVDA) and Micron. SanDisk, which fell hard earlier this month too, has $42 billion in multiyear supply agreements already signed and guided its own next quarter higher, not lower.

The bear case is just as real. The chip sector climbed roughly 130% over the prior twelve months before any of this started. That kind of run leaves little room for anything short of a perfect quarter, and even TSMC's genuinely strong one wasn't enough Thursday.

China's ChangXin Memory Technologies (CXMT) added a new wrinkle the same day. The company priced its IPO on Shanghai's STAR Market at a valuation of about $85.7 billion, raising roughly $9.8 billion, the second-largest STAR Market listing ever. CXMT is projecting first-half 2026 profit up more than 22-fold from a year earlier, on revenue growth of over 600%. It is already the world's fourth-largest DRAM maker by output, behind only Samsung, SK Hynix and Micron, and the new capital funds real expansion: 50,000 to 60,000 wafers of added capacity planned for this year alone.

CXMT is not yet a serious threat in HBM specifically. It has not announced an HBM roadmap, and it holds a fraction of the patents SK Hynix and Micron do. But in ordinary DRAM and mobile memory, where price competition matters most, a newly public and newly capitalized fourth competitor undercuts the idea that Samsung and SK Hynix's pricing power lasts indefinitely.

Korea's own leverage unwind hasn't actually finished playing out either. Regulators meeting to write new rules is not the same thing as the selling being done.

The more convincing read here: this looks like a richly priced market working off a very large prior run, not a change in what the AI buildout actually needs. But "more convincing" is not the same as certain, and anyone claiming to know exactly where the bottom is has more confidence than the facts support.

Sources

Prices are as of early afternoon trading on Thursday, July 16, and will move. This is general market commentary and not investment advice. Always do your own research and consider speaking with a licensed financial professional before making any investment decision.

Frequently asked questions

Why did chip stocks fall on July 16, 2026 even after TSMC's earnings beat?

TSMC posted record profit and raised its capex outlook, but the stock still fell around 3% and dragged the sector with it. Memory names were hit hardest, including Western Digital (down 9.8%), SanDisk (down 10.7%) and SK Hynix's Nasdaq shares (down 8.9%) by Thursday afternoon, as the sector worked off a roughly 130% prior-year rally and continued unwinding Korea's memory-pricing worries.

How much of the world's AI memory do Samsung and SK Hynix control?

In HBM, the high-bandwidth memory used in AI accelerators, SK Hynix holds about 62% market share and Samsung about 17%, together close to 80%. In standard DRAM, Samsung holds about 38% and SK Hynix about 29%, together roughly two-thirds of the global market.

Why does a crisis in Korea's stock market affect US chip stocks?

Samsung and SK Hynix are two of only three companies on the planet that can manufacture HBM at meaningful scale. When forced selling, margin calls and a surprise Bank of Korea rate hike hit those two companies at home, US companies that buy their memory, compete with it, or trade on memory staying scarce all feel the effect the same day.

Are chip stocks at a bottom yet?

Analysts are split. JPMorgan has called the pullback a buying opportunity and says the semiconductor upcycle is not peaking, citing still-strong fundamentals like TSMC's record quarter and SanDisk's $42 billion in signed supply agreements. Others point to the sector's roughly 130% prior-year rally, China's ChangXin Memory Technologies pricing an $85.7 billion IPO the same day as a new DRAM competitor, and Korea's leveraged-trading crisis still not fully resolved. This is not investment advice.

What is ChangXin Memory Technologies (CXMT), and is it a threat to Samsung and SK Hynix?

CXMT is China's largest DRAM maker, now the world's fourth-largest by output behind Samsung, SK Hynix and Micron. It priced an IPO on Shanghai's STAR Market on July 16, 2026 at an $85.7 billion valuation, raising about $9.8 billion to fund further expansion. It is not yet a serious threat in HBM, the AI-specific memory, since it has no announced HBM roadmap and holds far fewer patents than its rivals. Its bigger impact is on ordinary DRAM and mobile memory pricing.

Dennis Singleton · Markets Writer

Dennis Singleton has followed the markets closely for years and still finds them genuinely fascinating. He writes about stocks, AI, and semiconductors in plain language, cuts through the hype, and is straight about the risks as well as the upside. He does this because he wants readers to win.