Micron Technology and SanDisk stocks slipped in premarket trading on Tuesday as fresh evidence of China’s progress in memory chips revived concerns about competition.
Micron was down about 1.9% before the bell, while SanDisk fell roughly 3%. Both stocks entered September after 2026 gains driven by AI spending, tight supply and memory prices.
The immediate concern is ChangXin Memory Technologies, or CXMT, which has begun producing small quantities of HBM3E.
CXMT has reached HBM3E, but Micron still leads
CXMT’s progress matters because high-bandwidth memory has become critical to AI computing.
The Chinese company is producing HBM3E in small quantities and plans to expand output in 2027.
Alibaba’s T-Head and Cambricon are testing the memory alongside their processors, with potential adoption next year if testing succeeds.
Micron, Samsung Electronics and SK Hynix are already moving into HBM4, leaving CXMT behind the leaders. Production scale and yields also remain hurdles, as Micron has been shipping HBM4 in volume since the first quarter.
That is why Bank of America analyst Vivek Arya remains bullish on Micron. TipRanks reported that Arya sees “limited competition” from CXMT in advanced AI memory because the Chinese supplier remains more exposed to consumer and commodity DRAM.
BofA retained a Buy rating and a $1,550 price target on Micron.
The risk is not that CXMT suddenly displaces Micron, but China is moving from lower-value memory into products generating the industry’s strongest margins.
SanDisk faces a different China threat from YMTC
For SanDisk, the more direct competitive issue is NAND flash.
Yangtze Memory Technologies, or YMTC, captured about 14% of global NAND bit shipments in the second quarter, according to Counterpoint Research, placing it third by shipment volume.
YMTC is targeting the top spot globally by the end of 2027 and is seeking 33 billion yuan, or about $5 billion, in an IPO to fund production upgrades and research.
That matters because additional NAND supply can influence global pricing even if Chinese producers remain restricted in the US.
Citi analyst Atif Malik has called Chinese capacity additions the biggest long-term risk to the memory thesis.
The analyst expects “both DRAM and NAND prices decelerating Q/Q in the next four quarters,” with prices potentially peaking around the second quarter of 2027.
This is a key issue for SanDisk investors. YMTC does not need to dominate enterprise storage to affect the broader NAND market.
Today’s shortages still argue against panic
Current fundamentals remain more supportive than the China angle suggests.
Mizuho said in an August research note that memory remains the “key bottleneck” in the semiconductor supply chain as aggregate DRAM demand rises.
The firm maintained Outperform ratings on Micron and SanDisk, with targets of $1,300 and $1,875.
There is also a reminder from last month’s selloff. When Micron and SanDisk dropped on reports that Apple could eventually source Chinese memory, Lynx Equity Research analyst KC Rajkumar called the reaction “an overreaction,” according to Investing.com.
Rajkumar pointed to supply constraints and customer qualification hurdles limiting the immediate threat from Chinese suppliers.
That distinction remains important. CXMT’s HBM3E output is still small, while Micron and its global peers are advancing into HBM4. YMTC has gained meaningful NAND volume, but remains more exposed to lower-value products than established rivals.
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