Micron, Nvidia and AMD stocks fell sharply before Wall Street opened on Tuesday as investors questioned whether the artificial-intelligence chip boom can withstand stronger Chinese competition and increasingly expensive data-centre financing.
At 5:32 am ET on July 28, Micron was down 4.4%, Nvidia had lost 1.1% and AMD was roughly 3% lower in premarket trading.
The weakness extended Monday’s decline, when Nvidia fell 5%, AMD dropped 5.2% and Micron slipped 2.3%.
The selling was far more severe in Asia.
South Korea’s KOSPI closed 10.84% lower, while SK Hynix sank 14.7% and Samsung Electronics lost 14.4%.
China’s chip progress challenges the safest assumption
The immediate pressure came from reports that a Chinese state-backed company had begun producing domestic immersion deep-ultraviolet lithography equipment.
DUV machines print circuit patterns on wafers and could help Chinese manufacturers reduce their reliance on Western suppliers.
The development does not mean China has matched ASML’s most advanced equipment.
It nevertheless suggests that export controls may delay rather than permanently prevent Chinese technological progress.
Morningstar equity analyst Jing Jie Yu said China’s advances had unsettled investors worried about established semiconductor leaders.
However, she described the selloff as “largely a knee-jerk reaction and overdone” in comments reported by The Guardian, arguing that incumbents face no immediate meaningful threat.
Micron is particularly exposed because ChangXin Memory Technologies competes in DRAM.
CXMT surged 466% during its Shanghai debut after raising $8.6 billion, highlighting the capital available for China’s memory ambitions.
CXMT remains behind Micron in advanced high-bandwidth memory.
The longer-term concern is that new conventional DRAM capacity could replace imports in China, pressure global prices and reduce the valuation premium attached to established producers.
Nvidia’s financing role raises doubts about AI demand
The selloff also reflects discomfort over how the next wave of AI infrastructure will be financed.
Nvidia fell 5% on Monday after The Wall Street Journal reported that it was discussing a roughly $250 billion financing guarantee for an OpenAI data-centre project in Ohio.
The proposed support could lower the project’s borrowing costs, but it revived concerns about circular funding.
Investors are asking whether chip suppliers will increasingly need to support customers financially to sustain demand for their own products.
Swissquote senior analyst Ipek Ozkardeskaya noted that Nvidia’s five-year credit-default swap rose alongside the share decline.
Hyperscaler earnings will test AMD and Micron
AMD is being sold mainly as a read-through from the wider spending cycle.
Its Instinct accelerators, EPYC processors and Helios systems require cloud providers and model developers to keep expanding infrastructure.
Micron needs the same customers to continue buying HBM and data-centre DRAM.
UBS Global Wealth Management chief investment officer Mark Haefele said “uncertainty over the durability of capex and revenue growth” was hurting chip stocks.
Microsoft and Meta report on Wednesday, followed by Apple and Amazon on Thursday.
Investors will examine cash flow, AI revenue and capital-expenditure plans for evidence that spending remains profitable and financeable.
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