Investors worried about rising Chinese memory-chip competition may be focused on the wrong threat, according to Nicholas Mugalli, CEO and principal of World Trade Securities.
Mugalli said China is not one of his primary concern for memory companies, including Micron Technology Inc. (NASDAQ:MU) and SanDisk Corp. (NASDAQ:SNDK). Instead, he is watching Korea-based Samsung Electronics Co. because of its planned capacity expansion and ability to pursue market share.
Mugalli Says China Isn’t His Main Worry
“China isn’t one of my worries at all. This is just a typical talking point,” Mugalli said. He argued that memory supply cannot be expanded simply by increasing spending because manufacturers remain constrained by cleanroom space, semiconductor equipment, and lengthy construction timelines.
“A new fab takes three years on average,” Mugalli said, adding that Chinese producers remain limited by export controls and are behind industry leaders in high-bandwidth memory, or HBM.
Those comments contrast with concerns that intensified this week after Elon Musk said China would be “making a LOT of RAM in 2028.”
China’s ChangXin Memory Technologies has also reported progress in denser DRAM designs, while YMTC has expanded its position in NAND, fueling investor concerns that additional Chinese supply could eventually pressure memory pricing.
‘The Real Threat Is Samsung’
For Mugalli, the larger competitive risk comes from an established industry leader. “The real threat is Samsung,” he said.
Mugalli pointed to Samsung’s confirmation in July that it is building substantial new fab capacity and said that it “has the balance sheet to chase market share.”
“That’s the one I am watching,” he said.
Memory Stocks Face Supply Debate
The distinction has become increasingly important as memory shares sell off on concerns about future supply.
Micron, SanDisk, SK Hynix and Samsung have all faced pressure in October as investors debate whether new capacity could eventually end the current period of tight memory supply.
D.A. Davidson technology research head Gil Luria said Chinese suppliers do not currently participate in HBM and argued that any near-term competitive impact would fall more heavily on Samsung and SK Hynix than Micron. Luria said Micron is “fully aware of what CXMT is developing” when forming its supply outlook.
Rayliant Global Advisors Chief Market Strategist Phillip Wool said CXMT’s progress was an important development but argued that the immediate competitive threat remains limited because the company has yet to demonstrate large-scale production. “I read that more as a sign of how vulnerable AI sentiment is at this moment,” Wool said.
How Have These Stocks Performed?
| Stocks | 1-Month | 6-Months | YTD | 1-Year | 5-Year |
| MU | 0.51% | 103.67% | 226.28% | 359.80% | 1275.95% |
| SNDK | 8.23% | 51.70% | 487.59% | 866.82% | 3705.81% (Since Listing In Feb’25) |
| SKHY | -16.45% | -13.03% (Since Listing In July’26) | – | – | – |
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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