Chinese chip advances trigger week of global market swings

What happened

• CXMT floated in Shanghai on Monday, 27 July, rising 466% in value to 3.3tn yuan (£365bn).
• The same day, reports said China had built its own deep-ultraviolet lithography tools, a technique the Dutch company ASML had monopolised.
• South Korea's Kospi fell 11.5% on Tuesday and 6% more a day later, dragged by SK Hynix and Samsung Electronics.
• The Nasdaq briefly entered correction on Thursday; Nvidia lost more than 5% and Apple overtook it as the largest listed company.
• Strong Amazon and Microsoft results lifted the Kospi nearly 20% on Friday, after its worst month since October 2008.

The view from outside

The Guardian, writing from outside the US-China rivalry, notes CXMT makes DRAM memory rather than the GPUs at the core of AI systems, so it complements rather than competes with Nvidia. Analysts it quotes call the sell-off in memory shares an overreaction, citing a global memory shortage expected to last until 2030.

What could happen next

• Whether China can build lithography tools at scale is unconfirmed; analysts quoted by the Guardian say rival chip plants remain years away.
• Bloomberg reported on Monday a gap to CXMT's $1tn valuation target, with no detail beyond the headline.
• The continuing memory shortage is expected to make phones and computers more expensive.