AI chip capex jolt hits global memory stocks

Stacked memory chips on a circuit board as AI chip capex shift hits global memory stocks

Key Points

01TSMC (TSM) posted record Q2 profit but lifted 2026 capex to $60–$64 billion and announced a new $100 billion Arizona plan
02TSMC (TSM) shares slipped 2%–4% even as full-year revenue growth was guided to slightly above 40%
03Memory stocks fell sharply, with a DRAM ETF down about 7% and key names losing 4%–8%
04China’s CXMT IPO plan and a 15% Kioxia plunge added to DRAM oversupply fears and Nikkei weakness

TSMC’s record quarter and aggressive spending plans

Taiwan Semiconductor Manufacturing Co. (TSM) reported record second-quarter net profit of T$706.6 billion, supported by second-quarter revenue of about $40.2 billion. The company also lifted its full-year revenue-growth guidance to slightly above 40%, signaling strong demand for its advanced manufacturing services, including AI-related chips.

Alongside the strong operational performance, TSMC raised its 2026 capital-expenditure forecast to a range of $60 billion to $64 billion. It also unveiled plans for an additional $100 billion investment in Arizona, highlighting the scale of planned capacity expansion and overseas manufacturing build-out.

Despite these upbeat results and growth signals, TSMC shares traded lower on July 16, with intraday moves in the range of a roughly 2%–4% decline. The share reaction suggested investor unease over the intensity of future capital spending and the implications for returns.

Global memory and storage stocks slide

The same session saw a broad selloff in memory and storage companies. The Roundhill Memory ETF, which tracks DRAM-related equities, was reported down about 7% on the day, reflecting a sharp shift in sentiment toward the segment.

Individual memory and storage names including Micron (MU), SK Hynix, SanDisk (SNDK), Seagate and Western Digital (WDC) posted declines in the roughly 4%–8% range during the session. The moves indicated growing concern about the balance between rapid capacity additions and the durability of demand, particularly for AI infrastructure.

CXMT’s planned IPO and DRAM oversupply concerns

Investors also reacted to developments in China’s memory industry. ChangXin Memory Technologies moved to raise a large IPO on the Shanghai STAR Market in mid-July, with reports citing an offering size around CNY 66.6 billion, or roughly $8.5 billion to $9.8 billion.

Coverage linked the CXMT IPO plan to rising fears of intensified Chinese competition in DRAM and the risk of future oversupply. These concerns fed into the selloff in global memory shares, adding another source of pressure alongside the broader reevaluation of chip-sector capital spending.

Japanese market impact and Kioxia’s sharp decline

In Japan, memory maker Kioxia suffered one of the steepest individual moves, with its shares plunging about 15% on July 16. The drop reflected the same sector-wide pressures hitting memory and AI-linked stocks.

Kioxia’s decline contributed to a wider pullback across Japanese equities, helping push the Nikkei 225 (NKY) index down roughly 2.8% for the session. The scale of the move underscored how concerns around AI-era capex, DRAM supply, and pricing power are influencing sentiment across regional markets.

Key Takeaways

01Strong AI-driven demand is supporting record earnings at leading foundries, but investors are increasingly focused on whether very high capex plans can deliver attractive returns.
02The sharp declines in memory and storage stocks highlight market sensitivity to any signs of future DRAM oversupply and competitive pressure, particularly from China.
03CXMT’s sizable planned STAR Market IPO is a focal point for concerns that additional Chinese capacity could weigh on global pricing and profitability.
04The 15% fall in Kioxia and a 2.8% Nikkei drop show how chip-sector volatility is transmitting into broader Asian equity indices, not just isolated semiconductor names.

References