Hong Kong Investors Grow Pessimistic Over Memory Chip Market

Investors in Hong Kong are expressing increasing pessimism toward memory chip manufacturers, leading some to sell portions of their holdings. This shift in sentiment is driven by concerns regarding artificial intelligence spending, memory pricing, and the potential for increased competition from China.

Bank of America analyzed the sentiment and reported that while investors are wary, the bank expects strong margins and free cash flow for the sector. The financial institution forecasts only modest DRAM price declines and low-single-digit NAND price cuts beginning in the first quarter of 2027. Bank of America further noted that long-term supply agreements, which typically span five years, continue to support data-center construction with no current signs of order cuts or canceled deals.

Market research from TrendForce Corp. suggests that the competitive threat from China's ChangXin Memory Technologies is not yet significant. Despite these assessments, the pessimistic outlook continues to impact the stock of manufacturers such as SK Hynix.