The ongoing tariff battle between the two economic powerhouses has had some impact on demand but there are already warning signs of an impending slowdown, Sebastian Hou, a semiconductor investment analyst at the brokerage and investment group told CNBC at the CLSA Investors' Forum in Hong Kong.
Those signs include a decline in memory chip prices, a build-up in inventory levels and a slowdown in demand from high-growth areas such as data center servers, automotive and industrial, he said.
"In terms of the trade war impact, certainly there is some impact on the potential on the demand side but even without the trade war, in fact, the sector is going to go through this correction because (of) very high inventory across the supply chain," Hou added.
A correction is normally defined as a decline of 10 percent or more for the price of a financial asset.
Other analysts have made similar predictions in recent weeks. Morgan Stanley analyst Shawn Kim noted, after conversations with semiconductor buyers and sellers, that the environment for the memory market has become increasingly negative.