Key Highlights

● SanDisk tumbled Friday as worries about Chinese competition swept through memory stocks.

● Concerns centered on memory maker CXMT's progress in advanced 4F2 DRAM technology.

● All 30 PHLX Semiconductor Index members fell, and the index closed at 11,137.29.

● Lam Research reports October 21 and Western Digital October 22.

Memory stocks under pressure

SanDisk (NASDAQ:SNDK) tumbled in Friday's session, finishing among the heaviest decliners on the Nasdaq Composite, according to market data. The flash memory and storage company was caught in a sector-wide selloff in memory stocks driven by worries about competition from China.

Market reports said memory stocks fell on concerns about the progress of Chinese memory maker CXMT in 4F2 DRAM, an advanced memory-cell architecture designed to pack more storage into less space. Separate reports pointed to concerns that CXMT is advancing in DDR5, the current generation of computer memory. Any sign that Chinese manufacturers are closing the technology gap raises questions about future pricing power for established memory producers.

A heavy week for memory

Friday's losses capped a steep week for the group. According to market data, SanDisk, Micron and SK Hynix all posted heavy weekly pullbacks, with SK Hynix falling the most and SanDisk not far behind.

Peers fell sharply on Friday as well. Micron Technology (NASDAQ:MU) slid. Seagate Technology (NASDAQ:STX) and Western Digital (NASDAQ:WDC) both tumbled. Western Digital is due to report earnings after the close on Thursday, October 22.

SanDisk makes NAND flash memory used in solid-state drives, smartphones, memory cards and data center storage. Memory prices are notoriously cyclical, which tends to make memory stocks especially sensitive to news about supply and competition.

The chip selloff deepens

The memory decline was part of a broader slump in semiconductors. All 30 members of the PHLX Semiconductor Index fell, and the index closed at 11,137.29. In a 60-stock semiconductor basket, 57 names fell. Sources disagreed on the length of the sector's losing streak: several data sources counted eight straight declines, while others described it in longer historical terms.

Advanced Micro Devices (NASDAQ:AMD), Intel (NASDAQ:INTC), Broadcom (NASDAQ:AVGO) and Arm Holdings (NASDAQ:ARM) all fell sharply. The chip selling overlapped with a wider debate about AI financing, as investors moved from asking what AI can do to asking how it will be financed. Market reports said the rotation erased more than $1 trillion from semiconductor and AI-related stocks during the week.

Index picture

The Nasdaq Composite fell 572.99 points to 26,140.03, closing its worst week since the week ended June 26. The S&P 500 lost 84.62 points to 7,659.44, and the Dow Jones Industrial Average slipped 175.28 points to 52,002.41. Technology was the weakest sector, while energy, utilities and consumer staples gained. Stocks overseas also felt the chip selling, with South Korean equities sliding.

SanDisk Awaits CXMT News and Peer Reports

Investors will also look to Big Tech results, including Meta (NASDAQ:META) on October 21, for updates on AI data center spending, which has been a major source of demand for high-performance memory and storage. The Federal Reserve's next rate decision is due October 28, with PCE inflation data on October 29. Fed Chair Kevin Warsh declined to preview the decision, saying, "I don't prejudge meetings."

Memory investors will be watching for further news on CXMT's technology progress and any signs of how Chinese capacity could affect global memory pricing. Western Digital's earnings on October 22 and Lam Research (NASDAQ:LRCX)'s results on October 21 could offer fresh reads on storage and chip-equipment demand.