Micron shares retreat despite record DRAM prices on CXMT IPO
Micron Technology shares have dropped nearly 30% from a June peak as an $8.55 billion Chinese rival IPO and cloud provider hedging threaten to erode record DRAM pricing power.
Micron Technology shares fell sharply yesterday, changing hands around $876 after an intraday range of $873.63 to $982.40. The decline puts the stock roughly 28% below its June high of nearly $1,200. The immediate catalysts are reports that Chinese memory manufacturer CXMT is preparing an $8.55 billion initial public offering, and that AI cloud provider CoreWeave is exploring financial hedges against a potential drop in memory costs.
This sell-off is occurring while Micron's underlying business fundamentals show historic strength. The average selling price for DRAM recently hit a 10-year peak of $1.17. Recognizing this leverage, CEO Mehrotra has moved to lock in these elevated margins by securing 5-year supply agreements. The disconnect suggests the market is looking past current profitability to price in future supply risks.
The indiscriminate nature of the selling extends beyond Micron. KLA Corporation dropped 12% despite the company benefiting from lower costs, indicating a broad rotation out of semiconductor names. The sector had rallied roughly 82% in the first half of 2026, as measured by the SOXX index, making the current pullback a natural profit-taking event amplified by specific company news.
A familiar dynamic from Beijing
For long-term investors, the current dynamic echoes a previous cycle. During the 2016-2018 DRAM supercycle, Micron's share price moved in near lockstep with DDR3 and DDR4 spot prices. In 2018, China's National Development and Reform Commission opened an antitrust probe into Micron, Samsung, and SK hynix, attempting to directly cap pricing power through regulation.
The mechanism in 2026 is different, but the central actor remains a Chinese government-linked entity. Rather than using regulatory pressure to artificially suppress prices, Beijing is now attempting to compete that pricing power away by backing CXMT's market entry. Crucially, this competitive threat is currently being priced into Micron's equity before it actually materializes in the ASP data.
