Tech Sector Under Pressure: Memory & PCB Concepts Hit Hard, AI Fever Shows Signs of Divergence

Introduction

Recently, the global tech stock market has experienced a significant period of oscillation and adjustment. In A-share and HK stock markets, memory concept stocks, PCB concept stocks, and some AI large model-related stocks all suffered substantial declines, drawing widespread market attention. Among them, GigaDevice fell over 15% in a single day; leveraged products like the Southern 2x Long Samsung and SK Hynix fell over 20% and 33%, respectively; PCB leaders like Kingboard Group and Kingboard Laminates fell nearly 20%. Meanwhile, AI large model concept stock MiniMax fell over 17%, and Seres fell over 13%. This series of unusual movements not only reflects extreme short-term capital sentiment fluctuations but also reveals deep-seated challenges from structural pressures within the tech industry and changing external macro environments.

I. Memory Sector: Cyclical Downturn and Geopolitical Risks Overlap

Memory chips, as the "barometer" of the semiconductor industry, often affect the entire landscape with their price fluctuations. The sharp drop of over 15% in GigaDevice's stock is closely related to deteriorating supply-demand dynamics in the NOR Flash and NAND Flash markets it operates in. Recent financial reports from global memory giants Samsung Electronics and SK Hynix show memory chip prices continue to decline, inventories high, and the industry is moving from a super-cycle in 2021-2022 to a downturn. Leverage ETFs that track Samsung and SK Hynix fell even more sharply, indicating that the market's pessimistic expectations for the memory sector are rapidly self-reinforcing.

At a deeper level, the memory industry also faces geopolitical risks. Continued escalation of US semiconductor export controls against China has left Chinese memory companies "bottlenecked" in advanced process products, while global memory leaders are squeezed by both overcapacity and weak demand. Additionally, consumer electronics terminal demand recovery is sluggish; shipments of traditional applications like smartphones and PCs have not improved significantly, further suppressing memory chip shipment volumes and prices.

The above figure shows the current imbalance of high inventories and low demand in the memory industry. At the cycle bottom, investor risk appetite for related targets is significantly lowered, and the plunge in leveraged products amplifies this trend.

II. PCB Concept Stocks: Weak Demand and Cost Pressure Resonance

PCB, as the "skeleton" of electronic products, has its prosperity also highly correlated with downstream demand. Kingboard Group and Kingboard Laminates fell over 19% and 18% respectively, and YOFC fell over 12%. The decline in this sector mainly results from the resonance of multiple bearish factors.

First, prices of main raw materials for CCL and PCB—copper foil, fiberglass cloth, resin—have recently softened. While theoretically beneficial for lowering production costs, simultaneous downward pressure from downstream customers and shrinking shipments have squeezed corporate profit margins from both sides. Kingboard Group, as one of the world's largest CCL producers, has its product price and order visibility as benchmarks. The recent crash reflects market concerns about its short-term profitability.

Second, demand growth in areas like communication equipment and automotive electronics has fallen short of expectations. Although NEVs and solar storage provide structural increments for high-end PCB, the overall market scale has yet to offset declines in consumer electronics and traditional communications. YOFC's drop is more related to intensified competition in the optical fiber and cable industry and falling procurement prices.

III. AI Large Model Concept: From Frenzied Pursuit to Rational Return

AI large models have undoubtedly been the hottest track since 2023, but recent falls of over 17% in MiniMax and over 13% in Seres may indicate the sector is entering a phase of divergence and adjustment. AI concept stocks have accumulated huge gains, with some valuations far exceeding fundamental support. As the market's expectations for AI commercialization become more sober, investors are increasingly focusing on actual earnings and cash flow.

MiniMax, as a leading domestic AI large model startup, has seen its valuation balloon over the past year. However, the high cost of model training and inference, uncertainty of profit models, and unclear regulatory policies have all become factors weighing on its stock price. Seres, though deeply tied to Huawei and positioned in the smart vehicle sector, also faces challenges from price wars and slowing growth in the auto industry itself.

The pullback in AI large model concepts is essentially a necessary stage as the market shifts from "theme speculation" to "value verification." In the short term, concept stocks lacking earnings support will face significant pressure; in the long term, companies with technical barriers and commercial deployment capabilities are still expected to stand out.

IV. Summary and Outlook: Danger Holds Opportunity, Rational Layout

Overall, the collective decline of memory, PCB, and AI large model sectors results from the overlay of multiple negative factors: weak global economic recovery leading to tepid terminal demand; semiconductor cycle downturn pressuring related corporate earnings; reduced market risk appetite leading to selling of high-valuation names. These factors are unlikely to be fully reversed in the short term, and investors should remain cautious.

However, from a contrarian perspective, substantial declines may also breed new opportunities. The memory chip industry is expected to see a cyclical turning point between H2 2024 and 2025, when leading companies' earnings elasticity will be considerable. In the PCB field, high-end packaging substrates, HDI, and other sub-sectors still benefit from import substitution and technological innovation. For AI large models, capital concentration will accelerate industry survival of the fittest, and companies with true core competitiveness will command higher premiums.

For ordinary investors, blindly bottom-fishing is not advisable at this stage. Instead, closely monitor industry fundamental changes, focus on key operating data in corporate earnings, and external variables like macro policy environment and international trade conditions. Meanwhile, using index funds or sector ETFs for diversified allocation can effectively reduce single-stock risk.

The market always moves forward amid fluctuations. A deep adjustment is both a risk release and often the starting point for positioning for the future. Facing declines, staying rational and adhering to value will yield steady returns over the long cycle.