Is Micron's Incredible Run About to End?
Key Points
Micron, Samsung, and SK Hynix control the vast majority of the memory chip market.
Micron's stock has risen by 350% in the past year, even after this latest pullback.
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Micron (NASDAQ: MU) has been on an extraordinary run for the past year. The memory chipmaker has benefited from surging demand amid the AI revolution, combined with limited competition. Micron's stock has skyrocketed nearly 220% in 2026, even after a recent pullback. The company, along with a handful of others, owns the vast majority of the memory market share. That could all change, however, if China has anything to say about it.
The threat to Micron's dominance comes from two state-backed Chinese companies. Yangtze Memory Technologies is aiming to overtake its competitors in the NAND market in the near future. It is currently ranked fifth by revenue, behind major players including Micron, Samsung (OTC: SSNLF), and SK Hynix (NASDAQ: SKHY).
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DRAM is where Micron is exposed
The bigger threat is in the DRAM market, which accounts for 73% of Micron's revenue as of last quarter. ChangXin Memory Technologies is about to launch a new, denser chip by the end of the year. This is an issue for Micron, as it will not only erode the company's market dominance but also undermine its pricing power.
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In the short term, Micron still has an incredible competitive moat. The company's high-bandwidth memory business is generally safe for now. However, DRAM and NAND businesses could suffer more as China creates cheaper models.
Micron's demand still exceeds supply and likely will for the next few years, but China's competitive threat is real and could erode Micron's margins over time. Micron's run isn't over, but I do expect growth to slow. It's still a worthwhile investment for long-term investors, though.
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Catie Hogan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy.
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