Why Is Micron (MU) Falling? CXMT IPO, Apple Supplier Shift, and Asian Chip Rout

MICRON: Chart showing MICRON’s breakdown below the 200 EMA, $803.95 support, and RSI below 30. Image source: TradingView. CXMT’s Shanghai IPO valued the Chinese DRAM maker above $500 billion, which signals that the Chinese government is willing to invest heavily into semiconductors to become self-reliant. This is not a problem in the near-term for Micron as CXMT’s capacity is still small in high bandwidth memory, but the injection of such massive amounts of capital is going to change the long-term picture of the memory industry.

What’s more concerning is that Apple has asked the US government to grant waivers to buy memory from CXMT and YMTC for products sold outside the US. Micron will not see any impact until 2027 as suppliers take 12 to 18 months to be qualified, but this shows that Apple is already exploring alternative sources.

Overnight, Asian chip stocks were down sharply. SK Hynix fell 14.7% and Samsung dropped 13.4%. Rumors of CXMT developing a domestic DUV lithography tool added to the selling, leading to speculation about whether the entire AI buildout is financially sustainable.

MICRON has broken below the 200 period EMA at $904.18 and the $803.95 horizontal support line, which have flipped to resistance. The 50 period EMA at $923.63 is the upper limit of resistance.

MICRON (MU) Price Chart - Souce: Tradingview

RSI is below 30, which is technically in oversold territory, but it does not necessarily mean that a reversal is imminent. In a bearish trend, RSI can stay low for quite a while. The next support for MU is $742.22. Below that, $680.16. Resistance lies at $803.95, $904.18 (200 EMA) and $923.63 (50 EMA).

MICRON Key levels to watch

Tuesday’s range: $789.09 to $900.20 (open near $855). Current: $812.48 (-9.74%) Monday close: $900.20 (-2.25%). 52-week range: $103.38 to $1,255 CXMT: Shanghai IPO peaked above a $500 billion valuation. Will increase supply competition in 5-10 years Apple: WSJ reports that Apple is requesting 

US government waivers to source memory from CXMT and YMTC for non-US products Asian rout: SK Hynix -14.7%, Samsung -13.4%, KOSPI -10.8% HBM contracts: 16 non-cancelable HBM agreements, worth $22B+ in total. Supply sold out through 2026. No change Support: $803.95 (broken), $742.22, $680.16 Resistance: $803.95, $904.18 (200 EMA), $923.63 (50 EMA)

Why Is Micron Stock Falling Today?

Micron has dropped below $800 following three events. In the first, CXMT’s Shanghai stock market listing surged to a $500 billion valuation, albeit only momentarily. Although CXMT is unlikely to be a viable HBM supplier anytime soon, this event raised the specter of competition from China’s growing memory capacity in the long run.

Next, the Wall Street Journal reported that Apple had asked the U.S. government for exemptions to be allowed to purchase memory chips from CXMT and YMTC, two of its Chinese memory suppliers. That would be devastating news if true, as Micron is one of Apple’s primary memory chip providers.

Finally, the shares of SK Hynix and Samsung, the other major global suppliers of DRAM, have plunged 14.7% and 13.4%, respectively, on fears that CXMT could gain a foothold in the semiconductor supply chain, aided by its newly acquired deep ultraviolet (DUV) lithography equipment, and that there may be diminishing returns on spending for AI infrastructure overall.

Citi issued its “buy-the-dip” rating for Micron on July 24.agging global memory stocks lower. Citi named Micron a buy-the-dip opportunity on July 24.

Is Wall Street Still Bullish on Micron?

Most of Wall Street still rates Micron shares positively. About 29 to 30 analysts hold Strong Buy ratings. The consensus 12-month target stands at $1,569, with a high of $2,200, the bull case being based on the continued lack of HBM4 supply in the market and strong demand for AI applications, and a low of $361. 

The above estimates were made prior to today’s selloff, and while some will surely be adjusted lower, none of the changes caused by the Apple story and the rise of CXMT can change the fundamentals that made Micron a buy in the first place: the company’s 16 non-cancelable $22 billion in HBM contracts; the fact that it has already sold all its capacity until 2026; and UBS’s projection that Micron will generate $400 billion in cumulative free cash flow between now and 2028.

In just two trading sessions, Micron has fallen from its $935 peak to below $800, following the announcement of CXMT’s $500 billion IPO, reports that Apple is seeking to shift away from Micron memory sources, and a general chip crash in South Korea. From its current $812, it looks as though the $803.95 support has been breached and the chart’s next support level sits at $742.22. Its RSI indicator shows an oversold signal of below 30.

While the company’s 16 non-cancelable HBM contracts and its $22 billion in guaranteed revenue stand solid as ever, this week’s Fed decision and Apple’s response to the WSJ report should be closely watched. The consensus analyst target of $1,569 implies a 93% upside from $812 should the underlying business fundamentals remain intact.