Michael Burry is increasing his bearish bets on the semiconductor sector, specifically targeting memory chips, citing building inventories and increased Chinese supply. This thesis suggests a potential downturn for companies like Micron Technology and the broader iShares Semiconductor ETF (SOXX), which holds significant positions in these companies.
Michael Burry, known for his 'Big Short' bet, is doubling down on a bearish outlook for the semiconductor and memory chip sector. His thesis is based on observations from Acer's CEO regarding building memory inventories and increasing supply from Chinese manufacturers, which could pressure prices by late 2027. This directly contradicts the prevailing narrative of a prolonged memory shortage, which Burry believes was partly due to a temporary shift to HBM for AI. If Burry is correct, companies like Micron (MU) and the iShares Semiconductor ETF (SOXX), which has significant exposure to memory and semiconductor firms, could face downward pressure. This presents a key risk for investors holding long positions in these assets, while offering a potential opportunity for those aligned with Burry's bearish view, particularly in the short to medium term as supply dynamics evolve.