Since last month, when memory stocks hit their highs, SK Hynix Inc. (NASDAQ:SKHY) has plunged nearly 47%, and SanDisk Corp. (NASDAQ:SNDK) has lost more than 50%. Micron Technology Inc. (NASDAQ:MU) and Western Digital Corp. (NASDAQ:WDC) have each fallen roughly 33%.
Memory stocks have been hammered in July as investors bet that China’s rise in DRAM and fears of slowing AI investment signal the start of another semiconductor downturn. But SK Hynix’s earnings this week could determine whether that pessimistic narrative is justified — or whether investors have mistaken a timing issue for a collapse in demand.
Independent research firm Tessara argues investors are misreading the selloff, saying, “July traded as though memory demand had broken. We think the market is pricing the wrong failure mode.”
Shares of SK Hynix have now tumbled 41.5% thus far in July, on pace for their worst monthly performance since October 2008.
It’s A Pricing Debate, Not A Demand Issue
The latest leg lower accelerated after Korea Investment & Securities cut its earnings forecast for SK Hynix, triggering the stock’s worst trading session on record.
Investors interpreted the revision as evidence that AI memory demand was fading.
Then, the second trigger was competitive rather than cyclical.
ChangXin Memory Technologies closed its Shanghai STAR Market debut Monday more than 460% above its offer price, reviving questions about Chinese DRAM capacity.
CXMT held about 7.67% of the global DRAM market in 2025, according to its IPO prospectus, against a combined share near 90% for Samsung, SK Hynix and Micron.
Tessara disagrees.
The research argues Korea Investment’s lower estimate stems primarily from assumptions about how quickly SK Hynix recognizes higher DRAM prices under long-term contracts—not from weaker demand.
“The selloff turned a company-specific pass-through question into an industry-wide demand narrative,” Tessara said.
That distinction matters because AI memory pricing behaves differently from traditional commodity memory.
High-bandwidth memory (HBM) contracts are typically negotiated over much longer periods, meaning reported revenue can temporarily lag spot price increases even while end-market demand remains exceptionally strong.
The Physical Data Tell A Different Story
Tessara also argues that hard export data fail to support the market’s increasingly bearish interpretation.
According to Korean customs data, memory exports rose from $39.8 billion in the first quarter to $62.3 billion in the second quarter, while June marked the strongest month on record.
Commodity DRAM’s implied price per kilogram increased 58%, alongside a 15% rise in HBM-class shipped weight.
“But it means an industry-wide Q2 demand collapse is difficult to reconcile with the physical export data.”
That conclusion echoes comments from Counterpoint Research analyst MS Hwang, who recently told Benzinga that China’s advance remains concentrated in commodity memory rather than the HBM chips powering Nvidia’s AI infrastructure.
Meanwhile, Yuri Khodjamirian, chief investment officer at Tema ETFs, argued that the market continues to underestimate the structural transformation of the memory industry, saying supply remains constrained well into 2028.
The Earnings Could Settle The Debate
Tessara’s central estimate is 66 trillion to 67 trillion won in second-quarter operating profit, or roughly $45 billion at Tuesday’s exchange rate of about 1,470 won to the dollar.
The firm attaches a 65% probability to a result at or above 65 trillion won, 40% to 68 trillion or better, and 20% to 70 trillion or better.
More important than the headline numbers will be management’s commentary on pricing, HBM demand and customer contracts.
If SK Hynix confirms that AI demand remains robust and pricing is simply flowing through financial statements more slowly than investors expected, Wall Street may have spent the past month selling memory stocks for the wrong reason.
If not, the market’s fears about a broader AI memory slowdown could gain credibility.
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