ChangXin Memory Technologies shares fell as much as 6.5% on Monday, even after the Chinese chipmaker forecast a swing to profit for the first nine months of 2026. The company said it expects net profit of at least 131 billion yuan, or about $19.6 billion, compared with a 5.28 billion yuan loss a year earlier. Revenue for the period is projected at 265 billion to 270 billion yuan.
The decline came as a broader selloff in chip stocks spread from Wall Street to Asia, with investors fretting over debt-funded AI spending and the prospect of faster interest-rate hikes.
A forecast built on scarce memory
CXMT credited the AI build-out for its outlook. Demand for artificial intelligence has left DRAM chips in short supply and pushed prices higher since the second half of 2025. That scarcity has been a tailwind for memory makers, and CXMT is betting it will continue through the first three quarters of next year.
The company's rise in the market has been sharp. Counterpoint Research data shows CXMT captured 10% of global DRAM revenue in the second quarter, more than double its share a year earlier. Over the same period, SK Hynix's share slipped from 39% to 25%.
Wall Street's chip rout spills into Asia
The selloff began Friday in New York, where the Nasdaq Composite lost more than 2% and the S&P 500 fell 1.1%, capping its worst week since June. Chip stocks led the decline. By Monday, the weakness had carried into Asia.
In Seoul, the KOSPI fell as much as 3.2%, with Samsung Electronics and SK Hynix each down more than 4% at the low. Tokyo's Nikkei 225 slid about 2%. Samsung and SK Hynix together account for roughly half of the KOSPI index, so their moves carry outsized weight.
Foreign selling of chipmakers had already driven a 14.5% decline in the KOSPI last week. On Monday, foreign investors turned net buyers, cutting the index's opening loss roughly in half.
DeepSeek adds a new doubt
Adding to the pressure, Chinese AI startup DeepSeek's latest model raised questions about memory chip demand — the very market CXMT sells into. The concern is that more efficient AI models could require less memory than previously assumed, undermining the shortage that has lifted prices.
Last week, news of a CXMT chip advance on a denser DRAM design had already knocked Samsung and SK Hynix shares lower. The latest model from DeepSeek compounded those worries, even as CXMT's own forecast points to strong demand ahead.
What to watch
CXMT's profit forecast covers the first nine months of 2026, a period that will test whether the DRAM shortage persists or eases as new capacity comes online and AI models become more efficient. The company has not set a date for reporting those results. Investors will also be watching whether foreign buyers continue to return to Korean chip stocks after last week's exodus, and whether the KOSPI can hold its ground with Samsung and SK Hynix still under pressure.
