Micron Technology (MU) shares experienced a sharp decline on Monday, falling 6.4% to $678.30 by early afternoon, erasing an opening gain and reaching a session low of $677.96. The drop extended Friday's 6.6% loss, as investors reduced exposure to one of the year's most popular semiconductor stocks. The broader chip sector also weakened, with the Philadelphia Semiconductor Index falling more than 2%.
The selloff comes amid heightened uncertainty surrounding Samsung Electronics, the world's largest memory-chip maker. Samsung and its union are set to resume talks on Tuesday to prevent an 18-day strike that could begin Thursday. Over 45,000 workers could participate, potentially disrupting approximately 3% of global memory-chip production, according to Jefferies estimates cited by Barron's.
For Micron, the situation is complex. A Samsung strike could tighten memory supply—components essential for data storage in servers, phones, and PCs—and support prices. However, the stock's decline reflects broader concerns about rising Treasury yields and their impact on high-growth technology valuations. Adam Turnquist, chief technical strategist at LPL Financial, noted that investors are questioning how much interest rates and oil prices will affect markets.
The competitive landscape remains intense. SK Hynix, Samsung, and Micron are all negotiating multi-year supply deals with major technology companies racing to secure memory capacity. Reuters reported earlier this month that some customers have offered to invest directly in SK Hynix production lines, underscoring the severe scarcity of supply.
Micron's strong financial performance had attracted significant investor interest. In March, the company forecast fiscal third-quarter revenue of $33.5 billion (plus or minus $750 million) and non-GAAP diluted earnings of $19.15 per share (plus or minus 40 cents), with gross margins expected around 81%. TD Cowen analyst Krish Sankar raised his price target to $660 from $550 in late April, maintaining a Buy rating, noting that the stock's next phase will depend on earnings durability rather than another surprise.
The selloff was not isolated to Micron. Nvidia (NVDA) fell 1.9%, Advanced Micro Devices (AMD) lost about 2.0%, and Broadcom (AVGO) dropped 1.6%, indicating a broader retreat from AI-related semiconductor names. Oliver Pursche, senior vice president at Wealthspire Advisors, attributed part of the decline to uncertainty over Taiwan's role in chip production and profit-taking after a strong run.
Nvidia's upcoming earnings later this week will be a key test for the sector, which has surged on AI infrastructure spending. The downside risks remain clear: if Samsung reaches a deal, the supply premium may fade; if the strike disrupts customer operations and quality checks, the broader chip supply chain could face challenges; and if yields continue to rise, investors may reassess valuations for high-growth semiconductor stocks.
For now, Micron serves as a barometer for the AI buildout, with its stock price closely tied to developments in Seoul and Nvidia's earnings. The next major catalyst will likely come from Tuesday's Samsung talks or Nvidia's results later in the week.
