SanDisk Corporation (NASDAQ: SNDK) shares fell about 14% as investors worried that China’s expanding semiconductor industry could intensify competition in the NAND memory market. The two-day selloff erased nearly $49 billion in market value, making SanDisk one of the biggest decliners among chip stocks, and highlighting how quickly memory names can move when supply expectations shift.

The decline came amid concern that China’s semiconductor support programs could accelerate the growth of domestic memory producers, including Yangtze Memory Technologies Corporation (YMTC), a NAND competitor. Although SanDisk does not directly compete with CXMT, which focuses on DRAM, investors fear that broader Chinese chip expansion could eventually put pressure on NAND pricing and margins across the industry.

SanDisk closed Monday at $1,278.23 after an 11% drop, with premarket trading pointing to additional losses. Over two sessions, the stock fell more than 20% from the previous week’s close as investors reassessed the company’s long-term competitive position.

NAND Competition Concerns Grow

The market reaction reflects growing concern about future memory supply. Investors are watching whether increased Chinese production capacity could create excess supply and weigh on profit margins across the NAND industry, where pricing has historically been sensitive to changes in output.

YMTC has become a key focus, with around 11.8% of the global NAND market last year. Expectations that the company could expand capacity significantly have raised concerns that stronger competition could limit SanDisk’s pricing power.

SanDisk also underperformed the broader semiconductor sector during the selloff. Micron Technology (NASDAQ: MU) fell about 2.2%, while the Philadelphia Semiconductor Index also dropped roughly 2.2%, underscoring investor sensitivity to SanDisk’s NAND exposure.

Strong Outlook Faces Risks

Despite the stock decline, SanDisk continues to project a solid near-term financial outlook. The company expects fiscal fourth-quarter revenue between $7.75 billion and $8.25 billion, with adjusted earnings per share forecast between $30 and $33.

Management has been working to reduce the volatility of the memory business through long-term customer agreements. CEO David Goeckeler has emphasized building more predictable revenue streams through extended contracts and supply commitments.

Still, investors remain cautious because memory markets are highly cyclical. A rapid increase in supply or weaker NAND pricing could challenge the company’s margins even if demand remains strong, which is why upcoming results matter beyond a single quarter.

SanDisk’s AI opportunity remains a central part of its growth story. Datacenter revenue reached $1.47 billion in the latest quarter, accounting for about 25% of total sales. However, most revenue still comes from edge and other markets, leaving the company exposed to traditional memory cycles.

Earnings Could Set the Direction

Investors are now looking ahead to SanDisk’s fiscal fourth-quarter earnings report on August 5. The market will closely watch NAND pricing, customer demand, future capacity plans, and margin expectations, all of which could help clarify how management is seeing the competitive backdrop.

The company’s August 13 Investor Day is also expected to provide more detail on its long-term strategy and growth plans.

The recent decline has left investors debating whether the market has overreacted or correctly identified a growing competitive threat. Continued AI demand and disciplined supply could support a recovery, but faster Chinese memory expansion could keep pressure on the stock.

For now, investors are focused on how SanDisk navigates a changing global semiconductor landscape in which competition and supply dynamics remain key risks.