Michael Burry has been wrong before. He’s been wrong loudly, publicly, and expensively. But his latest bearish bet, a short position against memory chipmaker Micron Technology initiated at roughly $1,051.87 per share, is starting to attract serious attention from people who normally dismiss him as a perma-bear with a good publicist.

Bloomberg columnist Shuli Ren recently argued that despite Burry’s checkered track record on timing, his skepticism toward memory chip producers may be increasingly well-founded. The case boils down to a tension as old as capitalism itself: what happens when everyone rushes to build supply for demand that might not stick around.

The numbers behind the mania

Micron’s stock has surged approximately 241% year-to-date and roughly 697% over the past year, driven almost entirely by insatiable demand for high-bandwidth memory chips used in AI data centers.

Burry disclosed his short position around July 1-2, warning that the current AI-driven semiconductor rally echoes the speculative excesses of the late 1990s dot-com bubble. His specific language was characteristically blunt: he called the current trend the “beginning of the end” of the rally, citing FOMO, overcommitment, and greater-fool dynamics as the primary engines keeping prices elevated.

The supply tsunami nobody wants to talk about

Samsung and SK Hynix, the two other dominant players in the memory chip market, have announced plans to invest more than $500 billion in chip capacity expansion. That’s not a typo. Half a trillion dollars in new manufacturing capacity is heading toward a market that is currently priced for perpetual scarcity.

Memory chips have historically operated on brutal boom-bust cycles. Demand spikes, manufacturers race to add capacity, supply floods the market, prices collapse, and shareholders discover that buying at the top of a cycle is a deeply unpleasant experience. Micron’s own guidance suggests ongoing tightness in HBM supply, but Burry is betting that incoming supply will overwhelm demand before that tightness persists.

Burry’s broader semiconductor short

Micron isn’t Burry’s only target. His portfolio reveals a comprehensive bearish thesis against the entire AI semiconductor complex. He’s positioned with shorts or puts against Nvidia, Applied Materials, and the iShares Semiconductor ETF (SOXX). He’s also betting against Tesla and Caterpillar.

Burry has warned of a potential 30% correction in AI-linked stocks. His previous bearish positions on Nvidia and Palantir indicate this skepticism isn’t new.

What this means for investors

The critical variable to watch is the timeline on those $500 billion-plus capacity expansions from Samsung and SK Hynix. If that new production starts hitting the market before demand growth can absorb it, the price correction Burry envisions becomes significantly more likely. The memory chip market has never before seen investment of this magnitude flooding into new capacity simultaneously.

Timing the top of a mania is notoriously difficult, as Burry himself demonstrated during the housing crisis when he endured enormous drawdowns before being vindicated. But the underlying logic, that $500 billion in new supply crashing into a market priced for permanent shortage tends to end poorly, is hard to argue with.