Right now demand for DRAM is extremely high bordering on endless. Prices are going up. The incentive for one of the big players to undercut the other on cost even just a little bit to pick up market share is extremely lucrative.
It would also be dumb to cut production when prices are high because you increase the incentive for one of the outside players to suddenly ramp up production and jump in the market.
Not saying they aren't coordinating in other ways (following each other's leads on price hikes and availability). But again the context here is literally the opposite as last time.
I would argue that the DRAM price fixing scandal actually demonstrates that the industry operates like a cartel. During times of low demand and high supply, they will coordinate to protect prices, and then during spikes in demand (or alleged spikes in demand) they coordinate to keep the price from dropping.
Why would they need to coordinate to keep the price from dropping during a spike in demand? a spike in demand will obviously not be expected to lower prices regardless of collusion
Realistically, it wouldn’t be a meaningful drop to the consumer. But it’ll affect some executive’s ability to buy another unnecessary trinket.
They wouldn't you're right.
But I would expect for them to follow the sorts of behavior we've observed in other markets - egg prices, gasoline prices. When a spike occurs, even if as brief as a lightning strike, they will only very slowly drop prices, when in a purely capitalistic world the price drop ought to be equally fast - suggestive that the slow drop is a mutual agreed upon collusion. After all, it's in all sellers best interest to game that "consumers temporarily agreeable to scalping prices" as hard as possible, Nash equilibrium or whatever amongst sellers. Many such cases and more vicious and brutal punishments for such behavior would serve to benefit the common man, the final point and benefit of capitalism
Of course. Price drops only really come through in response to competition.
Long term high prices invite further investment. Investment arrives and wants a quick return. Fastest way to return is to sell above cost but below market. Established players respond. Yada yada. I once met a former projector salesman who was unbelievably angry that someone, I think Acer, came along and destroyed the ~2000 AUD hard price floor that projectors once commanded, which dropped the whole market and his commissions along with it.
Even when collusion is government endorsed instead of outlawed, the same rules apply. See the bromkonvention. You need the new player willing to take the 10% margin to hurt the bottom line of the guy taking 150%.
>when in a purely capitalistic world the price drop ought to be equally fast
No the price can only drop as fast as supply and competition can catch up. For an industry with high input capex costs, thats extremely slowly. I would think some banks would be keen to take a risk on a new RAM fab based on the demands coming from AI, but also I would personally not take the bet that AI will be in this state in 5 years time. So assuming Banks and other lenders are as skeptical as I am, they wouldn't lend, or would request a bigger entity guarantee the loan.
>brutal punishments for such behavior
Brutal punishments for failing to ramp up production? Or for not lowering prices for no reason? I really dont understand
Lmao he got rewarded for taking the fall.
Offshoring was 100% because of antitrust concerns. Copyright landlords and hardware manufacturers were concerned with Americans and their morals also having the skills to create endless competition.
American workers compensation prize was endless hustle jobs to distract them from political revolution.
The olds don't care if the kids end up unskilled knowledge serfs, fuzzy VHS tapes of outdated academics. The olds will be dead.
I mean, don't get me wrong, they are greedy. But that's been true for years. What's changed is the market.
You have to think about what’s happening in the context that its 2025. The US is different… there is no functional financial regulator. The CEO of OpenAI is trying to corner the market and be too big to fail. We’re seeing crazy stock swings with Oracle (whose CEO quit after the September stock event), AMD, Intel, etc. Much of the action is fueled by the circular relationships with OpenAI. Add the drama of malevolent players like Elon & POTUS.
If you’re the CEO of Micron, you’re in a tough spot. You have constrained capacity, delays in your new fab buildout that puts it out of play, and a market that is lucrative, but may be a massive Enron type event.
The people making the shovels need to hold tight. There’s no reason to collude. The smart move is to keep on trucking.
> Right now demand for DRAM is extremely high bordering on endless. Prices are going up. The incentive for one of the big players to undercut the other on cost even just a little bit to pick up market share is extremely lucrative.
Given this first statement, the last one makes no sense.
Either the demand is limited, giving sellers that undercut the ability to move more products... Or the demand is higher then production, making it nonsensical to undercut anyone, because you'll sell out anyway, no matter if you're cheapest or not
Why is demand extremely high right now when it wasn't a couple of months ago? What changed since then that caused it to triple overnight?
This time things are further complicated by the fact that the world is investing a sizable chunk of GDP into building RAM hungry data centers in hopes of building a god which will convert the rest of the world into data centers.
There is a similar issue happening in the manufacturing space where metal foundries are basically "full" up on allocation for other customers and will refuse to sell to you unless your purchase order is six digits otherwise you pay a hefty premium which once again drives capital towards larger corporations. Compounded by a stagnant jobs market the means that scarcity is just going up and up and nobody is re-investing to meet consumer demands because the market is poisoned by speculation to the absolute extreme
Even gpus hardly advanced since 2022 (4090) and the next generation is at least 1++ years off. Likely 2-3... And it's unclear wherever it will actually be an upgrade or more of the AI shenanigans they released with the 50 generation.
I'm very happy I ordered this in the summer, framework delivered it to me early this month. I wonder will these machine just be out of stock now or the price goes up a lot...
I'm as pro AI as it comes, and I love your way of putting it. Very poignant.
which company achieve AGI first would be a quadrillion company
Now, the relative shrink is tiny, so capacity adds are just wspm, in effect, and that gives 5%.
Put differently, you cannot invest your way out of the shortage, or into meaningful share....so you take profit.
guess I'm interpretting "1million wspm; add 10%; was effectively a 20-30% capacity increase" in 2015.
Not sure where 5% then comes from. Guessing "relative shrink" is referring to process size (5, 4, 2 nm, whatever) not linearly corresponding to density of transistors, etc.
Neither company know of the other purchase until it was a done deal.
All well and good when you're dictating terms with dozens of buyers, but probably not so much when a single buyer is dictating terms to a couple of sellers.
Oh ffs it's like the toilet paper thing. I was amazed how long that continued despite credible sources saying there is no shortage, just insane demand from the loonies that don't believe it would return to normal instantly if they would just stop buying more and more extras because "see, it's out again!"
Oh wait, they never fucking dropped.
Still waiting, all you bullshit, er, bullwhip truthers out there.
Data Center projects that were announced a couple months ago are now beginning to be built out.
Additionally, there have been some supply chain issues the past few years due to trade wars between the US, SK, and China [0], along with the earthquake that hit Taiwan last year [1].
Generally, you feel the pain of supply chain issues within 6-18 months of the initial incident, which is where we are now at because stockpiles have been reduced significantly.
[0] - https://www.digitimes.com/news/a20230310PD204/chip-war-memor...
[1] - https://www.reuters.com/technology/micron-flags-hit-its-dram...
Also we're hitting that 5 years after DDR5 being readily available which means that a lot of existing enterprise hardware that was on DDR4 is going EOL and being replaced with DDR5 which, given many platforms these days have many more channels available than previously, results in more DRAM being bought than was previously used per node and in total. A lot of enterprise was still buying new DDR4 into 2023 as it was a more affordable way to deploy systems with lots of PCIe lanes which was more important than any the costs associated with the performance gain from DDR5 or related CPU's. (Also, early days DDR5 wasn't really any faster than DDR4 with how loose the timing was unless you were willing to pay a BIG premium)
Regarding the hype of the day: AI specifically, part of it is the rise of wrappers and agents and inference in general that can run on CPU's/leverage system ram. These usecases aren't as sensitive to latency as the training side of things as the network latency from the remote user to the datacenter means latency hits due to hitting the CPU ringbus(infinity fabric, QPI, whatever you want to call it) results in a much less significant share over the overall overhead, and the cost/benefit/availability concerns there has also increased the demand for non-GPU AI compute and RAM.
I wouldn't rule out corruption/price fixing (They've done it before) but I have no evidence of this. Wouldn't surprise me, but I don't think this is it (unless this problem persists for several quarters/years)
There's some geopolitics and FOMO (Corporate keeping up with the joneses) and economics that goes into this as well but I can't really speculate on that specifically, that's not really my area of expertise. Suffice to say, it's kind of like a bank run where it's not so much that the demand itself hit the curve of the hockey stick, but it was gradually increasing until it hit a threshold that was starting to cause delays in delivery/deployments. Given how important many companies view being on the cutting edge here, this lead to sudden spike in volume customers willing to pay premiums for early delivery to hit deployment deadlines, artificially inflating demand and further constraining supply, which just fed back into that feedback loop pushing transient demand even higher.
0: Yes NVMe NAND flash is different than DRAM flash, but the systems/clusters that host the NVMe JBOD's tend to use lots of sysRAM for their index/metadata/"superhot" data layer (think memcached, Redis, the MDS nodes for Lustre, etc), and with the advent of CXL and SCM you can deploy even more DRAM to a cluster/fabric than what is strictly presented by the CPU/mobo's memory controllers/channels. This is not driving overall market volume, but is a source of fierce competition for supply at the very "top" of the DRAM/Flash market.
TL;DR: Convergence of a lot of things driving demand.
CXMT's DDR5 and LPDDR5 is also slowly gaining market shares, although not at the pace of YMTC due to yield and cost issues.
Both company are close or already at escape velocity. And then there will be a moment like electric car where DRAM and NAND will oversupply. Which is another reason why DRAM manufactures are eager to move to LPDDR6.
There's also been not one but two price fixing settlements at different times for the same companies. Almost like every few years they get bold enough to try again, and just settle as the cost of doing business
> Samsung Electronics has lowered its target for NAND wafer output this year to around 4.72 million sheets, about 7% down from the previous year's 5.07 million. Kioxia also adjusted its output from 4.80 million last year to 4.69 million this year.. SK hynix and Micron are likewise keeping output conservatively constrained in a bid to benefit from higher prices. SK hynix's NAND output fell about 10%, from 2.01 million sheets last year to around 1.80 million this year. Micron's situation is similar: it is maintaining production at Fab 7 in Singapore—its largest NAND production base—in the low 300,000-sheet range, keeping a conservative supply posture.
China YMTC (sanctioned by US) and CXMT are increasing production capacity.
Especially when those companies were already caught doing it multiple times over and told to stop.
There's no evidence that they're coordinating, though.
Both parties can have perfectly rational reasons to both exist and hate each other at the same time.
They also don't like being "grabbed by the balls" in a few years time when demand inevitably recedes. It's pretty obvious that people here are throwing a temper tantrum because they need to pay more, and companies aren't rushing in to raise supply, even if they themselves admit such actions would be dumb.
Thing is, I have 128GB of memtest86-passed DDR4 RAM, and while I don't need that much, the idea of spending ~$300 on 32GB was ludicrous. So I have a Ryzen 5700G now, and all is well.
I'll bet you'll see a lot more output, esp. with low margins -- to make the market uninteresting for new players.
Trade Mark - as long as dues are paid
Patents a yearly cap of N things and only the most worthy get a 20 year patent, world wide.
Copyright ~ 5 years auto with exponentially more expensive renewals in 5 year blocks.
Last week it went to $1300 and now it's not available anymore.
Guess I'll just skip AM5 and wait for AM6 at this rate...
In a week or two I might be able to make a profit by just selling the memory.
Busy getting my new build together so today I bought a 8 Tb WD Black 2280 SSD, a 2 Tb WD Black 2230 SSD and 2 x 64 Gb Crucial SODIMMs for (in comparison) a whopping 1850 USD...
Yes, that's pretty much a complete PC. Or at least it used to be.
Hopefully prices for Radeons remain a bit stable for the coming weeks, I'm still figuring out which one to buy to replace my aging Geforce 1080 and drive my 3840x2160 widescreen...
But it's just not selling. I guess most people don't even check ebay, and go straight to hardware online retailers.
I also have a lot more luck selling PC hardware on bespoke forums than on ebay etc.
If there's suddenly a potato famine, then the cost to other people who don't have a potato field is however much they are willing to pay to avoid starving.
Apple doesn't have a potato field, but what they do have is a ton of negotiating power, market share, and enduring relationships with the manufacturers.
There's also the implicit threat when negotiating with Apple that they might enter your market if you fuck around with them. If Apple perceived DRAM/NAND prices to be a significant threat to their carefully curated pricing structure, they might decide that they need to vertically integrate.
Last time I checked going from 16 to 32GB in a Mac Mini was more expensive (or as expensive) than buying two 16GB Mac Minis.
Yes, sellers fill the most expensive bids first.
>OpenAI's new "Stargate" project reportedly signed deals with Samsung and SK Hynix for up to 900,000 wafers of DRAM per month to feed its AI clusters, which is an amount close to 40% of total global DRAM output if it's ever met.
Right, so demand has pretty much doubled.
>In this cycle, manufacturers had cut back production and investment during the last downturn (2022), and they've been slow to ramp back up.
And manufacturers have been burnt by over production before and are cautious
>Another factor limiting supply of standard RAM is that memory firms are diverting their limited manufacturing capacity to the most lucrative products. Specifically, there's a gold rush for HBM, which is a special kind of memory used by AI accelerator GPUs, because HBM commands far higher prices and profit margins than commodity DRAM.
See above about filling the more lucrative bids first.
>I'm not saying that all of these reasons given aren't the cause for the recent price boom, but what I am saying is that it wouldn't be the first time that price-fixing occurred in the memory industry.
Ok so what should be done about it?
>While that second lawsuit didn't hold up in court (and failed in appeal), that ongoing suspicion exists for a reason.
K so there have been 2 claims, one spurious.
>Each firm knows that flooding the market would hurt all of their profits, so a form of unspoken coordination can occur, and this is next to impossible to prove.
See: Have been burnt by over production before. And Unspoken coordination is hardly an issue. Reacting to private information is bad, reacting to public information is normal and expected.
>It's hard not to see this supposedly coincidental aligned strategy of restraint and wonder if there's something more at play. All of these actions support pricing stability (for those companies) and suggests that no one is "breaking ranks" to grab a larger share by undercutting prices.
You are telling me that you are suspicious of an industry that has expanded, caused a glut that hurt their own businesses and killed their competitors, and are shying away from repeating that event that you outline as a clear mistake.
If theres so much money on the table, you will need another vendor. New RAM vendors have to weigh risk, including all the risk you have outlined, against what is likely a very massive capital outlay.
It might either be artificial to keep GPU prices where they are, or someone already started building their RAM-based AI datacenter.
> memory suppliers have both the motive and precedent to coordinate behavior, even tacitly, in order to keep prices high. When only a handful of firms control the taps, it doesn't take a formal cartel for them to collectively benefit from constrained supply. Each firm knows that flooding the market would hurt all of their profits, so a form of unspoken coordination can occur, and this is next to impossible to prove. The backdrop of past cartels makes it hard not to be cynical when hearing that "AI demand" is solely to blame for increased prices. Whether or not any collusion is happening now, it's clear that memory companies are profiting immensely from the current crisis. After bleeding financially during the last oversupply downturn, the major DRAM makers are now seeing record-high earnings in the third quarter of 2025 thanks to the price surge, and to put it bluntly, the shortage is great for business.
In some cases, firm == family, https://en.wikipedia.org/wiki/Chaebol
A chaebol is a large industrial South Korean conglomerate run and controlled by an individual or family. A chaebol often consists of multiple diversified affiliates, controlled by a person or group. Several dozen large South Korean family-controlled corporate groups fall under this definition.What choice do these companies have, even assuming the demand doesn't crash? They can build out and cause a glut in a few years. They can not build out and then what? Barriers to entry are high but not insurmountable; long term they'll go the way of UK shipbuilding. It might take a while, though. Also one defector building out would have massive advantage, so it doesn't seem like a stable equilibrium. See also constant bickering in the OPEC, an explicit cartel.
If AI companies continue to scale up and buy massive amounts of memory as prices spike, how much will that intensify the spike? Could feedback of this nature cause a price shock sufficient to pop the AI bubble earlier than it might have otherwise? How soon might that happen?
Is it actually standard modules that are high on demand, or are the chips directly soldered to custom mainboards?
This was my last respite for intellectual argumentation.
Now, every day there’s multiple stories where you have to be caught up on this cinematic universe where AI is fake and doesn’t work and no one uses it and anyone who does is a grifter and or amateur and or embarrassing and any data centers they build will be a waste and they’re probably not even being built and OpenAI is JUST like pets.com so this is basically the web bubble from 1999…so therefore, $X! (In this case, X = RAM supply shortage is fake and actually just coordinated price gouging)
As my MD friend noted wisely a couple weeks ago: it’s noteworthy how this became a culture after LLMs became ubiquitous and user friendly. It was tons of fun and happy times when we were going to reduce # of radiologists, not software engineers.
the aftermath for tax payer and your 401k would be devastating
My own wild guess is that this spike in RAM and storage costs is more of a potential drag on the tech sector as a whole than AI companies specifically. Maybe we'll see some systems being reengineered to cut the waste and the technical debt throughout and be a bit leaner and meaner, since that will be making a real difference to the bottom line.
I've maxed out the RAM on every (consumer mobo) build I've ever done, and have always ended up appreciating it. I did a Ryzen build with 192GB back in January, so despite the questionable signal integrity of DDR5 especially on AM5 (more than one DIMM on each channel means lower speed) this time turned out to be no exception. I also stocked up on 130TB of HDD and 30TB of SSD, as it was clear we were headed towards some kind of economic disaster. (look, I'm avoiding politics!)
But the best RAM purchase I ever did was during the dot com crash glut a few decades ago. I maxed out my Athlon XP with 3x 512MB sticks for $27 each. A gig and a half of RAM. Those were the days.
And you can't just manufacture or not the gold supply into scarcity