Michael Burry is doubling down on his bearish semiconductor thesis just as fresh warnings raise questions about how long the memory shortage can last.

In a recent Substack post, which he also highlighted on X, Burry cited Acer CEO Jason Chen's comments that memory inventories are building and Chinese suppliers are releasing more volume into the market. Chen expects additional Chinese capacity to eventually pressure prices, with the impact becoming more visible from late 2027.

Burry said the developments align with his view that the conventional memory shortage was partly created by manufacturers shifting capacity toward high-bandwidth memory (HBM) to meet surging AI demand. As production of conventional DRAM ramps back up, he believes the supply-demand balance could shift.

According to an X post by Michael Burry Stock Tracker, Burry has shorted Micron Technology (MU) and the iShares Semiconductor ETF (SOXX), while also holding bearish positions in NVIDIA Corp (NVDA), Applied Materials (AMAT), Nebius Group (NBIS) and Palantir Technologies Inc (PLTR).

SOXX Has Direct Exposure to Burry's Trade

SOXX offers a particularly direct way to track the semiconductor trade Burry is challenging.

Micron accounts for 8% of SOXX, Nvidia represents 7.5%, while Applied Materials has a 3.7% weight.

That means a reversal in the semiconductor cycle could have implications beyond individual memory stocks, particularly for broad semiconductor ETFs.

China Adds Another Supply Threat

The China factor makes the memory debate more complicated.

ChangXin Memory Technologies (CXMT) recently said its fifth-generation memory platform had entered mass production. The company is also expanding its manufacturing footprint as China seeks to increase domestic memory production.

Meanwhile, Samsung, SK Hynix Inc (SKHY) and Micron have redirected capacity toward HBM to capitalize on AI infrastructure spending.

That has created a delicate equation: AI demand is rising rapidly, but so is the industry's incentive to add capacity.

The ETF Question

The key question for semiconductor investors is no longer simply whether AI demand remains strong.

It is whether new memory supply can grow faster than AI-driven demand.

If that happens, Burry's trade could gain another data point and semiconductor ETFs such as SOXX and VanEck Semiconductor ETF (SMH) could find themselves caught between the AI boom and the semiconductor cycle that follows it.