Cathie Wood warns of ‘vicious’ memory chip cycles as China adds capacity

Cathie Wood is steering clear of traditional memory-chip makers, warning that expanding production capacity in China could heighten price volatility in an industry already known for sharp boom-and-bust cycles.

The ARK Investment Management cofounder told investors in Hong Kong that even though demand for high-bandwidth memory remains strong and supply is tight, additional Chinese competitors could eventually disrupt the market.

“The trend is up, but the cycles are vicious,” Wood said. “If you get a few more incremental competitors, especially out of China, the volatility will increase.”

China’s push to gain ground in the memory market comes as established suppliers SK Hynix (SKHY), Samsung Electronics (SSNLF) and Micron Technology (MU) dominate advanced memory production and HBM packaging. Chinese state-backed manufacturer ChangXin Memory Technologies has been expanding its DRAM output, potentially adding to competitive pressure. SK Hynix and Samsung shares have fallen 51% and 36%, respectively, from their highs this year.

Wood’s funds have posted gains in 2026, with the flagship ARK Innovation ETF (ARKK) up 14% year to date. The ARK Next Generation Technology ETF (ARKW) has advanced 12%, while the ARK Space & Defense Innovation ETF (ARKX) has gained 9.6% and the ARK Autonomous Technology & Robotics ETF (ARKQ) has risen 6%.

Wood also expressed limited enthusiasm for China’s technology sector, saying the country’s anti-involution measures have not resolved deflationary pressures or insulated the economy from its prolonged property slump.

On the broader AI trade, Wood disagreed with Broadcom (AVGO) CEO Hock Tan’s warning that investor enthusiasm has become speculative. She dismissed bubble concerns, arguing that artificial intelligence has the potential to deliver substantial productivity gains.

The comes as technology stocks tumbled Tuesday as a sell-off in U.S. semiconductor shares spilled into Asian and European markets.