SanDisk Stock Price Forecast: Chinese Manufacturers May Rapidly Break DRAM and NAND Industry Barriers; Shares to Fall Below $1,100?

TradingKey - On July 27 ET, SanDisk ( SNDK) plunged over 14% intraday to a low of $1,226.9, marking its lowest level since early May. Reportedly, Chinese memory chip maker ChangXin Storage went public today, completing an $8.6 billion initial public offering. The stock skyrocketed 466% on its trading debut, reflecting market confidence in China's growing market share in memory chips.

Analysts at Counterpoint Research stated that the commodity DRAM and NAND markets, which have a higher degree of standardization, could be impacted by Chinese memory manufacturers, and the industry's competitive landscape and investment logic are undergoing structural changes. Meanwhile, High Bandwidth Memory (HBM), with its extremely high technical barriers, will continue to be monopolized over the next few years by Micron ( MU ), Samsung, and SK Hynix ( SKHY ).

As a core supporting chip for AI computing power, HBM's technological barriers far exceed those of commodity memory products. Counterpoint stated that Chinese manufacturers will not achieve mass production of HBM3 until the first half of 2027 at the earliest. By then, the three major overseas giants will have already entered the HBM4 mass production phase, with their technology roadmaps iterating to the next generation, maintaining an approximate one-generation technological gap between the two sides.

However, the industry barriers for commodity DRAM and NAND may be quickly breached by Chinese manufacturers. These products are highly standardized, and customer decisions are highly price-sensitive, with the core barrier lying in capital investment rather than proprietary technology. Western Digital ( WDC) and SanDisk, have relatively weak competitive advantages in this field and will bear the brunt of the impact from Chinese manufacturers.

Reportedly, overall memory prices have surged nearly fourfold over the past year, with most of the gains concentrated in the last six months. However, the core bottleneck driving the price hike is not datacenter HBM, as commonly perceived by the market, but rather end-user categories such as smartphones, PCs, and consumer electronics, with the supply-demand gap in DRAM being particularly prominent. This consumer-grade commodity memory market, which has seen the highest price increases and offers the most lucrative profit margins, is precisely the core target market for Chinese manufacturers' capacity release. The ample profit potential provides an excellent entry window for these latecomers.

SanDisk 2-Hour Stock Chart, Source: TradingView

According to SanDisk's stock chart, the price plunged over 14% intraday to hit a new periodic low today, breaking through the first support level of $1,325 and confirming a reversal from its high into a downward trend.

Currently, close attention should be paid to the Fibonacci 1.272 extension ($1,224) and the key psychological level of $1,200. A break below these could trigger a combination of technical selling and stop-loss orders, opening up further downside room toward the Fibonacci 1.618 extension ($1,095).

A sharp drop is typically followed by a rebound, with the first target being to reclaim the periodic low ($1,325). However, this price has been effectively broken and has now turned into resistance. Furthermore, a downtrend does not usually end in a single day; even if the market demands a rebound, its height will be highly limited.

Therefore, even if a rebound occurs, it is more likely to be a continuation of the decline. It is recommended to wait for clear bottoming signals (such as extreme volume contraction + long lower shadows + stabilization at key round-number levels).