The Roundhill Memory ETF (DRAM) plummeted 8.26% during intraday trading on Thursday, reflecting a sharp downturn for the memory chip sector.
The decline was triggered by SK Hynix's formal announcement of a five-year plan to double wafer capacity across all product lines, including HBM, DDR5, and 3D NAND, signaling massive future supply additions. This news prompted profit-taking in memory-related equities amid what analysts have described as overheated sector sentiment following a significant year-to-date rally.
Broader industry concerns also weighed on investor sentiment. Multiple U.S. industry associations have warned that explosive artificial intelligence (AI) demand is creating a critical supply-demand imbalance, with AI data centers consuming a disproportionate share of production capacity and leading to sharp price increases that threaten other vital industries. Additionally, analysts have raised concerns about the sustainability of the memory super cycle, noting that while DRAM contract price forecasts remain strong, extreme concentration of demand in AI and severe cost pressures on downstream consumer electronics could eventually undermine broader market health.