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Growing trade tensions between the United States and China, coupled with lingering concerns about the Chinese economy, have shaken confidence in some of the key players in the sector. Weak iPhone sales, coupled with a deceleration in crypto-currency mining activities, fueled investor anxiety related to weakening demand.
Mr Nigam, of Credit Suisse, said that for the future, investors should focus on supply-side issues in the sector. Micron, SK Hynix and Samsung all reported a reduction in capital expenditures.
"Based on the current (capital) forecast of the top three memory manufacturers, you expect an underlying supply growth that will not exceed 15 percent," Nigam said. "The growth in demand, even in a reasonably bearish scenario, will probably be well ahead of that."
As a result, he said, the discussion in the sector could be shifting from "current stock concerns and strong concerns (average selling price) to concerns about potential shortages … before the end." of the year ".
– Reuters, along with Maggie Fitzgerald and J.R. Reed of CNBC, contributed to this report.
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