DRAM Slides as Memory's Scarcity Trade Turns Into a Glut Fear

The Glut Fear Arrives

On July 2 the memory group led another leg lower, and this time the catalyst was a change in story rather than plain profit-taking. A Morningstar research note warned that a large slice of AI names could give back 20% to 30% before becoming buyable again, with memory flagged as the most exposed corner. The specific worry is concrete: announced capacity additions from Samsung and SK Hynix are expected to soften memory pricing as supply catches up with demand, while AI capital spending is seen peaking in 2026 and tapering after. That reframes the entire thesis DRAM's holdings have run on. Midday, SanDisk fell 11% to about $1,802, Seagate and Western Digital each dropped 7%, and Micron slid 4%, dragging the Roundhill Memory ETF down with them.

Why This Isn't July 1 Again

The July 1 selloff — Micron down 8%, SanDisk down 10%, Western Digital down 7% — read as textbook profit-taking. Those three ran roughly 305%, 858%, and 271% year-to-date through June, and handing back a slice of that is mechanical. July 2 is different because it questions the premise, not just the price, and the premise is contested from both directions. A class action filed June 25 in the Northern District of California accuses Samsung, SK Hynix, and Micron — which together control nearly 90% of the DRAM market — of restricting conventional DRAM supply to drive a 700% price surge, using the shift to high-bandwidth memory as cover. The same supply squeeze plaintiffs call illegal price-fixing is exactly what powered the trade DRAM tracks. If that squeeze is deliberate, a glut is a choice the oligopoly can defer; if new capacity or regulators force supply back, the scarcity premium unwinds fast.

What July 10 Puts in Play

The cleanest test lands next week. SK Hynix — the world's second-largest memory maker, up more than 300% this year — debuts ADRs on Nasdaq on July 10 under the ticker SKHY, targeting up to $29 billion in what would be the largest ADR offering on record, surpassing Alibaba's 2014 debut. The proceeds are earmarked almost entirely for memory-capacity expansion — a new fab and advanced packaging. Read plainly, that is a memory giant converting a scarcity-driven valuation into the exact supply the market just started pricing as a risk. A strong pricing validates continued appetite for AI-memory names; a soft one confirms the glut fear has teeth. Either way, DRAM's next move is more likely set by SK Hynix's order book than by any single holding's tape.