ChangXin Memory's Next-Gen Memory Chip Technology Announcement Sends Global Markets Tumbling
Global stock markets, including South Korea's, tumbled after Chinese chipmaker ChangXin Memory announced it had developed next-generation memory semiconductor technology.
The technology reduces the area occupied by each memory cell by standing previously horizontal transistors (semiconductor devices that control electrical signals) upright, boosting integration density — the amount of circuitry packed into a small area. In theory, cell area shrinks by 33 percent while data capacity grows by 50 percent. It is also a workaround for China's inability to import advanced lithography equipment due to U.S. sanctions.
ChangXin Memory said it would release memory chips using its "4F²" technology within the year. However, it withheld key details such as operating speed, power consumption, and yields. "There's no need to panic over this alone or react with hypersensitivity as if China has already overtaken our technological capabilities," said Seok Byeong-hoon, an economics professor at Ewha Womans University.
Behind the market's sensitivity to news out of China lies anxiety over the long-term profitability of the AI industry. AI companies are taking on astronomical debt to keep investing, but their earnings outlook remains uncertain. Denise Egan of the IMF's research department said excessively optimistic expectations about AI could trigger a financial market correction.
Attention is now focused on third-quarter earnings announcements due at the end of the month. Markets are watching whether cloud companies — the driving force behind the AI boom — will revise their capital spending plans, which could send related stocks moving sharply again.
