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> Hopefully the shortage leads large purchasers to engage in long-term contracts with the memory manufacturers which give them the confidence to invest in new f
by Aurornis 1y ago
> Hopefully the shortage leads large purchasers to engage in long-term contracts with the memory manufacturers which give them the confidence to invest in new fabs and increased capacity.
Most DRAM is already purchased through contracts with manufacturers.
Manufacturers don't actually want too many extremely long term contracts because it would limit their ability to respond to market price changes.
Like most commodities, the price you see on places like Newegg follows the "spot price", meaning the price to purchase DRAM for shipment immediately. The big players don't buy their RAM through these channels, they arrange contracts with manufacturers.
The contracts with manufacturers will see higher prices in the future, but they're playing the long game and will try to delay or smooth out purchasing to minimize exposure to this spike.
> Additionally, we're likely to see Chinese fab'd DRAM now, which they've been attempting since the '70s but never been competitive at.
Companies like Samsung and SK Hynix have DRAM fabs in China already. This has been true for decades. You may have Chinese fab'd DRAM in the computer you're using right now.
Are you referring to complete home-grown DRAM designs? That, too, was already in the works.
- timschmidt 1y ago> Are you referring to complete home-grown DRAM designs? That, too, was already in the works. Yes, via cxmt as discussed by Asianometry here: https://www.youtube.com/watch?v=mt-eDtFqKvk https://www.youtube.com/watch?v=mt-eDtFqKvk As I mentioned, various groups within China have been working on China-native DRAM since the '70s. What's new are the margins and market demand to allow them to be profitable with DRAM which is still several years behind the competition.
- throwaway48476 1y agoLots of low end android boxes use cxmt ddr4.
- throwaway2037 1y ago> Manufacturers don't actually want too many extremely long term contracts because it would limit their ability to respond to market price changes. I don't agree with this sentence. Why would not the same apply advice to oil and gas contracts? If you look at the size and duration of oil and gas contracts for major energy importers, they often run 10 years or more. Some of the contracts in Japan and Korea are so large, that a heavy industrial / chemical customers will take an equity stake in the extraction site. Except silicon, power, and water (and a tiny amount of plastic/paper for packaging), what else does a fab need that only produces DRAM? If true, then power is far and away the most variable input cost.
- justaboutanyone 1y ago> Except silicon, power, and water Various chemicals too, https://haz-map.com/Processes/97 https://haz-map.com/Processes/97
- throwaway2037 1y agoGreat point. You are the only one who mentioned this! Example: photoresist film.
- overfeed 1y ago> Why would not the same apply advice to oil and gas contracts? Because oil & gas suppliers only ever sell one product, and memory fabs can dynamically switch product mix in response to supply & demand to optimize profits. The same sand, power and water can make DDR4, HBM or DDR5
- throwaway48476 1y agoOil and gas suppliers have several products: gas, diesel, jet a, propane, naptha, asphalt etc.