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That is not contracting their supply. Contracting their supply would mean taking fans offline. They are still increasing their supply! Maybe it isn’t possible

That is not contracting their supply. Contracting their supply would mean taking fans offline. They are still increasing their supply! Maybe it isn’t possible to built that much extra capacity. Maybe there isn’t the necessary budget/capital for that level of expansion? Maybe 5% is a sustainable rate of growth (and their supply chain), but 20% isn’t? There are lots of other factors at play here. Contracting ‘relative to demand’ is a really disingenuous way to frame the argument.

ksec 8y ago
Exactly. You don't need to be in DRAM / NAND or SemiConductor Industry, any industry are the same in their "projected" demand. There are always the intention they over project it, especially to those analysts reporting those figures, it is in their best interest to have DRAM / NAND maker to expand their capacity while they get much lower price. Then there is the maths of 20% increase in "bits". You see you don't need to build new fab to have increase in "bits" capacity. 3D NAND, 3D DRAM, EUV DRAM which Samsung is working on. Sub 10nm Node which Samsung / Micron are also working on and coming soon. All of these will increase their "bits" capacity without substantial investment. And as DDR5 standardise with larger maximum capacity per bank, better yield and leading node, and an expected increase of "bits" capacity by 50%+ in the next 3 years. Who will be there to say we will sell 50% more in 3 years time? Especially when Mobile sales are already slowing. There is the China question. Before any media coverage started in late 2017 and 2018. China had always have plan to have their own DRAM and NAND Fab, with government money started pouring in 2015. That is, in the worst possible situation, assuming China somehow suddenly understand how to make DDR4, LPDDR4, what is there to stop them the race to bottom, and their massive influx of cash to build out new Fabs to bring huge capacity into the industry. Are you really willing to burn your own money, in the tens of billions against a nation? Look at what happen to Steel, Solar Panel, etc The only difference is making DRAM is a lot harder then those two. I specifically leave out NAND here because 3D NAND are even harder for them to understand and grasp. And I too, wanted cheaper DRAM and NAND. And I know in the old Cartel working, where they actually "reduce" capacity and hold price together via talks. But right now, I think the market dynamics is that they don't need to do any of these tricks to get what they wanted.

ksec 8y ago

Exactly. You don't need to be in DRAM / NAND or SemiConductor Industry, any industry are the same in their "projected" demand. There are always the intention they over project it, especially to those analysts reporting those figures, it is in their best interest to have DRAM / NAND maker to expand their capacity while they get much lower price. Then there is the maths of 20% increase in "bits". You see you don't need to build new fab to have increase in "bits" capacity. 3D NAND, 3D DRAM, EUV DRAM which Samsung is working on. Sub 10nm Node which Samsung / Micron are also working on and coming soon. All of these will increase their "bits" capacity without substantial investment. And as DDR5 standardise with larger maximum capacity per bank, better yield and leading node, and an expected increase of "bits" capacity by 50%+ in the next 3 years. Who will be there to say we will sell 50% more in 3 years time? Especially when Mobile sales are already slowing. There is the China question. Before any media coverage started in late 2017 and 2018. China had always have plan to have their own DRAM and NAND Fab, with government money started pouring in 2015. That is, in the worst possible situation, assuming China somehow suddenly understand how to make DDR4, LPDDR4, what is there to stop them the race to bottom, and their massive influx of cash to build out new Fabs to bring huge capacity into the industry. Are you really willing to burn your own money, in the tens of billions against a nation? Look at what happen to Steel, Solar Panel, etc The only difference is making DRAM is a lot harder then those two. I specifically leave out NAND here because 3D NAND are even harder for them to understand and grasp. And I too, wanted cheaper DRAM and NAND. And I know in the old Cartel working, where they actually "reduce" capacity and hold price together via talks. But right now, I think the market dynamics is that they don't need to do any of these tricks to get what they wanted.