5 ms·

Dram alternates between feast and famine; it's the nature of a business when the granularity of investment is so huge (you have a fab or you don't, and they cos

by ajb 11mo ago

Dram alternates between feast and famine; it's the nature of a business when the granularity of investment is so huge (you have a fab or you don't, and they cost billions -maybe trillions by now). So, it will swing back. Unfortunately it looks like maybe 3-5 years on average, from some analysis here: https://storagesearch.com/memory-boom-bust-cycles.html https://storagesearch.com/memory-boom-bust-cycles.html (That's just me eyeballing it, feel free to do the math)

addaon 11mo ago
Nothing costs trillions.
- chmod775 11mo ago
  If you had a trillion dollars you might find some things are for sale that otherwise wouldn't be...
  - nolok 11mo ago
    To be fair, nobody HAS a trillion dollar either. They have stuff that may be worth a trillion dollar when sold.
- boguscoder 11mo ago
  Have you seen our debt recently?..
jbverschoor 11mo ago
A waiver is a waiver. The cost is per square mm. It’s pure supply and demand
- chmod775 11mo ago
  No, a wafer is very much not a wafer. DRAM processes are very different from making logic*. You don't just make memory in your fab today and logic tomorrow. But even when you stay in your lane, the industry operates on very long cycles and needs scale to function at any reasonable price at all. You don't just dust off your backyard fab to make the odd bit of memory whenever it is convenient. Nobody is going to do anything if they can't be sure that they'll be able to run the fab they built for a long time and sell most of what they make. Conversely fabs don't tend to idle a lot. Sometimes they're only built if their capacity is essentially sold already. Given how massive the AI bubble is looking right now, I personally wouldn't expect anyone to make a gamble building a new fab. * Someone explained this at length on here a while ago, but I can't seem to find their comment. Should've favorited it.
  - incrudible 11mo ago
    > Sometimes they're only built if their capacity is essentially sold already. "Hyperscalers" already have multi-year contracts going. If the demand really was there, they could make it happen. Now it seems more like they're taking capacity from what would've been sold on the spot or quarterly markets. They already made their money.
  - jbverschoor 11mo ago
    Sure, yes the cost of producing a wafer is fixed. Opex didn’t change that much. Following your reasoning, which is common in manufacturing, the capex needed is already allocated. So, where does the 2x price hike come from if not supply/demand? The cost to produce did not go up 100%, or even 20% Actually, DRAM fabs do get scaled down, very similar to the Middle East scaling down oil production.
    - zozbot234 11mo ago
      DRAM/flash fab investment probably did get scaled down due to the formerly low prices, but once you do have a fab it makes sense to have it produce flat out. Then that chunk of potential production gets allocated into DRAM vs. HBM, various sorts of flash storage etc. But there's just no way around the fact that capacity is always going to be bottlenecked somehow, and a lot less likely to expand when margins are expected to be lower.
    - chmod775 11mo ago
      > So, where does the 2x price hike come from if not supply/demand? It absolutely is supply/demand. Well, mostly demand, since supply is essentially fixed over shorter time spans. My point is that "cost per square mm [of wafer]" is too much of a simplification, given that it depends mostly on the specific production line and also ignores a lot of the stuff going on down the line. You can use to look at one fab making one specific product in isolation, but it's completely useless to compare between them or when looking at the entire industry. It's a bit like saying the cost of cars is per gram of metal used. Sure, you can come up with some number, but what is it really useful for?
- deleted 11mo ago
  [deleted]
Yokolos 11mo ago
I wouldn't be so sure. I've seen analyses making the case that this new phase is unlike previous cycles and DRAM makers will be far less willing to invest significantly in new capacity, especially into consumer DRAM over more enterprise DRAM or HBM (and even there there's still a significant risk of the AI bubble popping). The shortage could last a decade. Right now DRAM makers are benefiting to an extreme degree since they can basically demand any price for what they're making now, reducing the incentive even more. https://www.tomshardware.com/pc-components/storage/perfect-storm-of-demand-and-supply-driving-up-storage-costs https://www.tomshardware.com/pc-components/storage/perfect-s...
- zozbot234 11mo ago
  The most likely direct response is not new capacity, it's older capacity running at full tilt (given the now higher margins) to produce more mature technology with lower requirements on fabrication (such as DDR3/4, older Flash storage tech, etc.) and soak up demand for these. DDR5/GDDR/HBM/etc. prices will still be quite high, but alternatives will be available.
  - kees99 11mo ago
    > produce more mature technology ... DDR3/4 ...except current peak in demand is mostly driven by build-out of AI capacity. Both inference and training workloads are often bottlenecked on RAM speed, and trying to shoehorn older/slower memory tech there would require non-trivial amount of R&D to go into widening memory bus on CPU/GPU/NPUs, which is unlikely to happen - those are in very high demand already.
    - ifwinterco 11mo ago
      Even if AI stuff does really need DDR5, there must be lots of other applications that would ideally use DDR5 but can make do with DDR3/4 if there's a big difference in price
      - shevy-java 11mo ago
crote 11mo ago
Is this still the case in 2025, though? In a traditional pork cycle there's a relatively large number of players and a relatively low investment cost. The DRAM market in the 1970s and 1980s operated quite similarly: you could build a fab for a few million dollars, and it could be done by a fab which also churned out regular logic - it's how Intel got started! There were dozens of DRAM-producing companies in the US alone. But these days the market looks completely different. The market is roughly equally divided up between SK Hynix, Micron, and Samsung. Building a fab costs billions and can easily a year of 5 - if not a decade - from start to finish. Responding to current market conditions is basically impossible, you have to plan for the market you expect years from now. Ignoring the current AI bubble, DRAM demand has become relatively stable - and so has the price. Unless there's a good reason to believe the current buying craze will last over a decade, why would the DRAM manufacturers risk significantly changing their plans and potentially creating an oversupply in the future? It's not like the high prices are hurting them...
- lazide 11mo ago
  Also, current political turbulence makes planning for the long term extremely risky. Will the company be evicted from the country in 6 months? A year? Will there be 100% tariffs on competitions imports? Or 0%? Will there be an anti-labor gov’t in effect when the investment might mature, or a pro-labor? The bigger the investment, the longer the investment timeframe, and the more sane the returns - the harder it is to make the investment happen. High risk requires a correspondingly high potential return. That everyone has to pay more for current production is a side effect of the uncertainty, because no one knows what the odds are of even future production actually happening, let along the next fancy wiz-bang technology. But people do need the current production.
darkwater 11mo ago
My guess is that they will plummet down when the AI bubble bursts.
ksec 11mo ago
I am so glad both top rated and majority of comments on HN finally understands DRAM industry instead of constant DRAM is a cartel that is why things are expensive. Also worth mentioning DRAM and NAND's profit from Samsung is what keep the Samsung Foundry fighting TSMC. Especially for those who thinks TSMC is somehow a monopoly. Another things to point out which is not mentioned yet, China is working on both DRAM and NAND. Both LPDDR5 and Stacked NAND are already in production and waiting for yield and scale. Higher Price will finally be perfect timing for them to join the commodity DRAM and NAND race. Good for consumer I suppose, not so good for a lot of other things which I wont go into.
- rtaylorgarlock 11mo ago
  re: other things, I bet I agree.
- ls612 11mo ago
  DRAM manufacturers have literally been convicted of price fixing in the past why do you have to white knight for them?
  - deleted 11mo ago
    [deleted]
  - hollerith 11mo ago
    Most of us who've been on Earth for a while know that courts often get it wrong. Even if the particular court decision you mention was correct does not mean that price fixing is the main reason or the underlying reason DRAM prices sometime go up.
    - lazide 11mo ago
      They blatantly were doing it, admitted to it, and did it again later. What kind of crazy is this? Is this the ‘but he loves me, he wouldn’t hit me again’ of the tech world?
      - 11mo ago
fullstop 11mo ago
Historically, yes. But we haven't had historical demand for AI stuff before. What happens when OpenAI and NVIDIA monopolize the majority of DRAM output?

by ajb 11mo ago

addaon 11mo ago

Nothing costs trillions.

chmod775 11mo ago
If you had a trillion dollars you might find some things are for sale that otherwise wouldn't be...
- nolok 11mo ago
  To be fair, nobody HAS a trillion dollar either. They have stuff that may be worth a trillion dollar when sold.
boguscoder 11mo ago
Have you seen our debt recently?..

jbverschoor 11mo ago

A waiver is a waiver. The cost is per square mm. It’s pure supply and demand

chmod775 11mo ago
No, a wafer is very much not a wafer. DRAM processes are very different from making logic*. You don't just make memory in your fab today and logic tomorrow. But even when you stay in your lane, the industry operates on very long cycles and needs scale to function at any reasonable price at all. You don't just dust off your backyard fab to make the odd bit of memory whenever it is convenient. Nobody is going to do anything if they can't be sure that they'll be able to run the fab they built for a long time and sell most of what they make. Conversely fabs don't tend to idle a lot. Sometimes they're only built if their capacity is essentially sold already. Given how massive the AI bubble is looking right now, I personally wouldn't expect anyone to make a gamble building a new fab. * Someone explained this at length on here a while ago, but I can't seem to find their comment. Should've favorited it.
- incrudible 11mo ago
  > Sometimes they're only built if their capacity is essentially sold already. "Hyperscalers" already have multi-year contracts going. If the demand really was there, they could make it happen. Now it seems more like they're taking capacity from what would've been sold on the spot or quarterly markets. They already made their money.
- jbverschoor 11mo ago
  Sure, yes the cost of producing a wafer is fixed. Opex didn’t change that much. Following your reasoning, which is common in manufacturing, the capex needed is already allocated. So, where does the 2x price hike come from if not supply/demand? The cost to produce did not go up 100%, or even 20% Actually, DRAM fabs do get scaled down, very similar to the Middle East scaling down oil production.
  - zozbot234 11mo ago
    DRAM/flash fab investment probably did get scaled down due to the formerly low prices, but once you do have a fab it makes sense to have it produce flat out. Then that chunk of potential production gets allocated into DRAM vs. HBM, various sorts of flash storage etc. But there's just no way around the fact that capacity is always going to be bottlenecked somehow, and a lot less likely to expand when margins are expected to be lower.
  - chmod775 11mo ago
    > So, where does the 2x price hike come from if not supply/demand? It absolutely is supply/demand. Well, mostly demand, since supply is essentially fixed over shorter time spans. My point is that "cost per square mm [of wafer]" is too much of a simplification, given that it depends mostly on the specific production line and also ignores a lot of the stuff going on down the line. You can use to look at one fab making one specific product in isolation, but it's completely useless to compare between them or when looking at the entire industry. It's a bit like saying the cost of cars is per gram of metal used. Sure, you can come up with some number, but what is it really useful for?
deleted 11mo ago
[deleted]

Yokolos 11mo ago

I wouldn't be so sure. I've seen analyses making the case that this new phase is unlike previous cycles and DRAM makers will be far less willing to invest significantly in new capacity, especially into consumer DRAM over more enterprise DRAM or HBM (and even there there's still a significant risk of the AI bubble popping). The shortage could last a decade. Right now DRAM makers are benefiting to an extreme degree since they can basically demand any price for what they're making now, reducing the incentive even more. https://www.tomshardware.com/pc-components/storage/perfect-storm-of-demand-and-supply-driving-up-storage-costs https://www.tomshardware.com/pc-components/storage/perfect-s...

zozbot234 11mo ago
The most likely direct response is not new capacity, it's older capacity running at full tilt (given the now higher margins) to produce more mature technology with lower requirements on fabrication (such as DDR3/4, older Flash storage tech, etc.) and soak up demand for these. DDR5/GDDR/HBM/etc. prices will still be quite high, but alternatives will be available.
- kees99 11mo ago
  > produce more mature technology ... DDR3/4 ...except current peak in demand is mostly driven by build-out of AI capacity. Both inference and training workloads are often bottlenecked on RAM speed, and trying to shoehorn older/slower memory tech there would require non-trivial amount of R&D to go into widening memory bus on CPU/GPU/NPUs, which is unlikely to happen - those are in very high demand already.
  - ifwinterco 11mo ago
    Even if AI stuff does really need DDR5, there must be lots of other applications that would ideally use DDR5 but can make do with DDR3/4 if there's a big difference in price
    - shevy-java 11mo ago

crote 11mo ago

Is this still the case in 2025, though? In a traditional pork cycle there's a relatively large number of players and a relatively low investment cost. The DRAM market in the 1970s and 1980s operated quite similarly: you could build a fab for a few million dollars, and it could be done by a fab which also churned out regular logic - it's how Intel got started! There were dozens of DRAM-producing companies in the US alone. But these days the market looks completely different. The market is roughly equally divided up between SK Hynix, Micron, and Samsung. Building a fab costs billions and can easily a year of 5 - if not a decade - from start to finish. Responding to current market conditions is basically impossible, you have to plan for the market you expect years from now. Ignoring the current AI bubble, DRAM demand has become relatively stable - and so has the price. Unless there's a good reason to believe the current buying craze will last over a decade, why would the DRAM manufacturers risk significantly changing their plans and potentially creating an oversupply in the future? It's not like the high prices are hurting them...

lazide 11mo ago
Also, current political turbulence makes planning for the long term extremely risky. Will the company be evicted from the country in 6 months? A year? Will there be 100% tariffs on competitions imports? Or 0%? Will there be an anti-labor gov’t in effect when the investment might mature, or a pro-labor? The bigger the investment, the longer the investment timeframe, and the more sane the returns - the harder it is to make the investment happen. High risk requires a correspondingly high potential return. That everyone has to pay more for current production is a side effect of the uncertainty, because no one knows what the odds are of even future production actually happening, let along the next fancy wiz-bang technology. But people do need the current production.

darkwater 11mo ago

My guess is that they will plummet down when the AI bubble bursts.

ksec 11mo ago

I am so glad both top rated and majority of comments on HN finally understands DRAM industry instead of constant DRAM is a cartel that is why things are expensive. Also worth mentioning DRAM and NAND's profit from Samsung is what keep the Samsung Foundry fighting TSMC. Especially for those who thinks TSMC is somehow a monopoly. Another things to point out which is not mentioned yet, China is working on both DRAM and NAND. Both LPDDR5 and Stacked NAND are already in production and waiting for yield and scale. Higher Price will finally be perfect timing for them to join the commodity DRAM and NAND race. Good for consumer I suppose, not so good for a lot of other things which I wont go into.

rtaylorgarlock 11mo ago
re: other things, I bet I agree.
ls612 11mo ago
DRAM manufacturers have literally been convicted of price fixing in the past why do you have to white knight for them?
- deleted 11mo ago
  [deleted]
- hollerith 11mo ago
  Most of us who've been on Earth for a while know that courts often get it wrong. Even if the particular court decision you mention was correct does not mean that price fixing is the main reason or the underlying reason DRAM prices sometime go up.
  - lazide 11mo ago
    They blatantly were doing it, admitted to it, and did it again later. What kind of crazy is this? Is this the ‘but he loves me, he wouldn’t hit me again’ of the tech world?
    - 11mo ago

fullstop 11mo ago

Historically, yes. But we haven't had historical demand for AI stuff before. What happens when OpenAI and NVIDIA monopolize the majority of DRAM output?