NEW YORK — Micron Technology shares declined alongside other U.S. semiconductor companies as China's drive for chip self-sufficiency intensified pressure on domestic memory makers. Nvidia fell 5.1 percent to $196.22.
Beijing has long prioritized domestic semiconductor production to reduce reliance on foreign technology. Recent government initiatives have channeled capital into local chip foundries and memory producers, consistent with China's "Made in China 2025" industrial policy goals.
China's strategy centers on heavy subsidies for domestic firms including Yangtze Memory Technologies Co. and Changxin Memory Technologies. Those subsidies enable local companies to undercut established players such as Micron in the NAND flash and DRAM markets.
Micron CEO Sanjay Mehrotra has said the Chinese government support creates an uneven playing field. Commerce Secretary Gina Raimondo has also raised concerns about unfair trade practices and overcapacity risks from Chinese chipmakers, fueling calls for continued U.S. export controls.
Analysts at Susquehanna Financial Group estimate Chinese memory chip production could capture 15 percent of the global DRAM market by 2028, up from less than 5 percent currently. That shift would directly cut into revenue for U.S. and South Korean suppliers. Micron derives a substantial portion of its revenue from markets exposed to Chinese competition.
The intensified competition erodes Micron's pricing power and revenue growth. Companies with significant China sales also face market access risk if Beijing steers domestic technology buyers toward local suppliers.
Nvidia's decline, while tied to broader market dynamics, reflects sector-wide sensitivity to geopolitical and competitive pressure.
The United States has implemented export controls on advanced semiconductor technology to China, targeting equipment and design software critical to leading-edge production. China has responded by shifting focus to mature-node chips and memory, segments where U.S. controls have less direct impact.
Micron's next earnings report, expected in late September, will provide updated guidance on pricing trends, inventory levels and the competitive landscape. Further policy announcements from either government could alter the sector's outlook.
The Nasdaq fell 0.5 percent to 24,842. Microsoft rose 2.6 percent and Alphabet gained 2.1 percent, offering some offset to semiconductor weakness.
Memory chips remain critical infrastructure for AI systems, sustaining long-term demand. The open question for investors is which suppliers—domestic or foreign—will fill that demand as China pushes its technology companies to source locally.
