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What's happening right now is very different than what happened back during the dot com crash. When they were doing price fixing it was because there was a glut

What's happening right now is very different than what happened back during the dot com crash. When they were doing price fixing it was because there was a glut of supply and demand was tanking. Prices were falling and they coordinated to keep prices from falling less. 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.

bakugo 11mo ago
> Right now demand for DRAM is extremely high bordering on endless 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?
- ares623 11mo ago
  Maybe Some nerds joked at lunch that if we hoard all the RAM we cut it off from competitors. They saw what COVID did to supply chains and thought they’d be so smart if they could simulate it.
  - gishh 11mo ago
    No no no, it’s all just the bullwhip effect, remember? Remember when prices went fucking nuts during Covid and then dropped? Oh wait, they never fucking dropped. Still waiting, all you bullshit, er, bullwhip truthers out there.
  - bigiain 11mo ago
    DRAM 2025 as toilet paper from 2020. Seems plausible.
- alephnerd 11mo ago
  > Why is demand extremely high... 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-memory-chips-south-korea.html https://www.digitimes.com/news/a20230310PD204/chip-war-memor... [1] - https://www.reuters.com/technology/micron-flags-hit-its-dram-supply-taiwan-earthquake-2024-04-11/ https://www.reuters.com/technology/micron-flags-hit-its-dram...
- davoneus 11mo ago
  I've heard it was Sam Altman and OpenAI basically buying every wafer available from both Samsung and SKHynix at the start of October. Neither company know of the other purchase until it was a done deal.
  - Scaevolus 11mo ago
    The CEO of OpenAI and OpenAI didn't coordinate?
    - ndriscoll 11mo ago
      Samsung and SK Hynix. OpenAI made deals to buy almost half of manufactured DRAM in the world. There's speculation that after this was announced, other companies started making their own deals in a panic, further driving demand.
      - lucb1e 11mo ago
        > after this was announced, other companies started making their own deals in a panic, further driving demand. 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!"
        zozbot234 11mo ago
        This is almost certainly what's going on right now in the retail market. OTOH it's also a semi-rational response to volatility and uncertainty as to future wholesale prices, due to, e.g. the projected build-out of future AI datacenters. As with any durable good, whenever the price might be expected to rise in the future, people will want to hoard stockpiles and the expected price rise will be brought forward to the present.
  - Panzer04 11mo ago
    Kind of funny to see manufacturers get screwed by their own opaque pricing policies for once. 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.
- TrainedMonkey 11mo ago
  Fundamentally because demand and supply curves are lagged. This drives DRAM flood and drought cycles. Right now high DRAM prices are driving fab investment up and demand down. In 3-5 years new fabs will cause DRAM glut that will drive prices down. Lower prices will stimulate demand via things like doubling DRAM size in consumer electronics as companies compete on getting the number bigger. Eventually demand curve will eclipse the supply and we will end up in the DRAM drought again. 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.
  - vablings 11mo ago
    The biggest issue here is that it hurts smaller consumers. Scaling up a fab to produce ram takes 5+ years, people generally buy new hardware ~5 years so this lifecycle of hardware for some people is now locked out. Let's say you was due for an upgrade this year you now might be priced out of the market for the next 5 years and basically due to poor business practices 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
    - ffsm8 11mo ago
      Do people really still upgrade so often? I mean it made sense pre 2015 for desktops, and pre 2020 for laptops... But since... Not much has changed from a performance standpoint. 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.
      - pimeys 11mo ago
- loeg 11mo ago
  It didn't triple overnight. Contracts for 2026-2027+ hyperscaler orders get negotiated gradually over time and when those contracts are N% higher than last year, ~all supply is spoken for.
- 0manrho 11mo ago
  People pulling their heads out of their ass as to how to actually deploy these systems at scale (AKA to do this effectively, you need to do more than just throw pallets of GPU's at it, such as properly considering Topologies of both NVMe-over-Fabric and PCIe roots/lanes [0]) combined with advances in various technologies (eg RDMA, CXL, cuDF/BaM/GPUD2S/etc) that meaningfully enhance how system ram can be integrated and leveraged are a big part of it. 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.
sc68cal 11mo ago
> 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. 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. https://en.wikipedia.org/wiki/DRAM_price_fixing_scandal https://en.wikipedia.org/wiki/DRAM_price_fixing_scandal
- lpribis 11mo ago
  > Following the plea agreement he was sentenced to 8 months in prison and fined US$250,000.[6] Lee was subsequently promoted to President of Samsung Germany in 2009, and then President of Samsung Europe in 2014. Lmao he got rewarded for taking the fall.
  - flanderizedNed 11mo ago
    Was in the room working for a hardware company during the offshoring phase of high tech manufacturing 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.
  - deleted 11mo ago
    [deleted]
- tshaddox 11mo ago
  If there are a small number of sellers and barriers to entry are high, we should expect at the bare minimum "tacit collusion": https://en.wikipedia.org/wiki/Tacit_collusion https://en.wikipedia.org/wiki/Tacit_collusion
- ChadNauseam 11mo ago
  > 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
ffsm8 11mo ago
I do not have any particular insight into the market, I was just extremely confused reading this in particular > 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
- lazide 11mo ago
  If demand is high and supply is fixed (generally the case) you can also pull a DeBeers, grab everyone by the balls, and charge 3x (or more) the already high prices everyone would already get when you sell out your inventory.
  - energy123 11mo ago
    To the extent that demand is price inelastic, which in practice means a lack of substitutes and the product serving an essential need.
    - lazide 11mo ago
      With the AI boom ongoing, plenty of people with deep pockets are desperate. Perfect time for some gouging.
    - tliltocatl 11mo ago
      Demand for diamonds is rather elastic, yet DeBrees did it.
- deleted 11mo ago
  [deleted]
deleted 11mo ago
[deleted]
casey2 11mo ago
Supply and demand "theory" being used yet again to justify obvious price fixing.
- blackoil 11mo ago
  If fixing, Why now? Why this much?
deleted 11mo ago
[deleted]
Spooky23 11mo ago
I think implying that the DRAM makers are nefarious is nuts. What would you do in their shoes? 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.
m4rtink 11mo ago
Or they don't want to be the ones holding the bag when all the AI companies that ordered RAM from them end up bankrupt and insolvent ? The stuff they ordered might even be so custom to be useless to be sold by the creditors, leaving the RAM manufacturers hanging dry with unpaid invoices and idle capacity. So they just do the old cartel thing and wait it out - with the added benefit of selling the same stuff they have been making for twice the price!

bakugo 11mo ago

> Right now demand for DRAM is extremely high bordering on endless 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?

ares623 11mo ago
Maybe Some nerds joked at lunch that if we hoard all the RAM we cut it off from competitors. They saw what COVID did to supply chains and thought they’d be so smart if they could simulate it.
- gishh 11mo ago
  No no no, it’s all just the bullwhip effect, remember? Remember when prices went fucking nuts during Covid and then dropped? Oh wait, they never fucking dropped. Still waiting, all you bullshit, er, bullwhip truthers out there.
- bigiain 11mo ago
  DRAM 2025 as toilet paper from 2020. Seems plausible.
alephnerd 11mo ago
> Why is demand extremely high... 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-memory-chips-south-korea.html https://www.digitimes.com/news/a20230310PD204/chip-war-memor... [1] - https://www.reuters.com/technology/micron-flags-hit-its-dram-supply-taiwan-earthquake-2024-04-11/ https://www.reuters.com/technology/micron-flags-hit-its-dram...
davoneus 11mo ago
I've heard it was Sam Altman and OpenAI basically buying every wafer available from both Samsung and SKHynix at the start of October. Neither company know of the other purchase until it was a done deal.
- Scaevolus 11mo ago
  The CEO of OpenAI and OpenAI didn't coordinate?
  - ndriscoll 11mo ago
    Samsung and SK Hynix. OpenAI made deals to buy almost half of manufactured DRAM in the world. There's speculation that after this was announced, other companies started making their own deals in a panic, further driving demand.
    - lucb1e 11mo ago
      > after this was announced, other companies started making their own deals in a panic, further driving demand. 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!"
      - zozbot234 11mo ago
        This is almost certainly what's going on right now in the retail market. OTOH it's also a semi-rational response to volatility and uncertainty as to future wholesale prices, due to, e.g. the projected build-out of future AI datacenters. As with any durable good, whenever the price might be expected to rise in the future, people will want to hoard stockpiles and the expected price rise will be brought forward to the present.
- Panzer04 11mo ago
  Kind of funny to see manufacturers get screwed by their own opaque pricing policies for once. 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.
TrainedMonkey 11mo ago
Fundamentally because demand and supply curves are lagged. This drives DRAM flood and drought cycles. Right now high DRAM prices are driving fab investment up and demand down. In 3-5 years new fabs will cause DRAM glut that will drive prices down. Lower prices will stimulate demand via things like doubling DRAM size in consumer electronics as companies compete on getting the number bigger. Eventually demand curve will eclipse the supply and we will end up in the DRAM drought again. 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.
- vablings 11mo ago
  The biggest issue here is that it hurts smaller consumers. Scaling up a fab to produce ram takes 5+ years, people generally buy new hardware ~5 years so this lifecycle of hardware for some people is now locked out. Let's say you was due for an upgrade this year you now might be priced out of the market for the next 5 years and basically due to poor business practices 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
  - ffsm8 11mo ago
    Do people really still upgrade so often? I mean it made sense pre 2015 for desktops, and pre 2020 for laptops... But since... Not much has changed from a performance standpoint. 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.
    - pimeys 11mo ago
loeg 11mo ago
It didn't triple overnight. Contracts for 2026-2027+ hyperscaler orders get negotiated gradually over time and when those contracts are N% higher than last year, ~all supply is spoken for.
0manrho 11mo ago
People pulling their heads out of their ass as to how to actually deploy these systems at scale (AKA to do this effectively, you need to do more than just throw pallets of GPU's at it, such as properly considering Topologies of both NVMe-over-Fabric and PCIe roots/lanes [0]) combined with advances in various technologies (eg RDMA, CXL, cuDF/BaM/GPUD2S/etc) that meaningfully enhance how system ram can be integrated and leveraged are a big part of it. 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.

sc68cal 11mo ago

> 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. 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. https://en.wikipedia.org/wiki/DRAM_price_fixing_scandal https://en.wikipedia.org/wiki/DRAM_price_fixing_scandal

lpribis 11mo ago
> Following the plea agreement he was sentenced to 8 months in prison and fined US$250,000.[6] Lee was subsequently promoted to President of Samsung Germany in 2009, and then President of Samsung Europe in 2014. Lmao he got rewarded for taking the fall.
- flanderizedNed 11mo ago
  Was in the room working for a hardware company during the offshoring phase of high tech manufacturing 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.
- deleted 11mo ago
  [deleted]
tshaddox 11mo ago
If there are a small number of sellers and barriers to entry are high, we should expect at the bare minimum "tacit collusion": https://en.wikipedia.org/wiki/Tacit_collusion https://en.wikipedia.org/wiki/Tacit_collusion
ChadNauseam 11mo ago
> 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

ffsm8 11mo ago

I do not have any particular insight into the market, I was just extremely confused reading this in particular > 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

lazide 11mo ago
If demand is high and supply is fixed (generally the case) you can also pull a DeBeers, grab everyone by the balls, and charge 3x (or more) the already high prices everyone would already get when you sell out your inventory.
- energy123 11mo ago
  To the extent that demand is price inelastic, which in practice means a lack of substitutes and the product serving an essential need.
  - lazide 11mo ago
    With the AI boom ongoing, plenty of people with deep pockets are desperate. Perfect time for some gouging.
  - tliltocatl 11mo ago
    Demand for diamonds is rather elastic, yet DeBrees did it.
deleted 11mo ago
[deleted]

deleted 11mo ago

[deleted]

casey2 11mo ago

Supply and demand "theory" being used yet again to justify obvious price fixing.

blackoil 11mo ago
If fixing, Why now? Why this much?

deleted 11mo ago

[deleted]

Spooky23 11mo ago

I think implying that the DRAM makers are nefarious is nuts. What would you do in their shoes? 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.

m4rtink 11mo ago

Or they don't want to be the ones holding the bag when all the AI companies that ordered RAM from them end up bankrupt and insolvent ? The stuff they ordered might even be so custom to be useless to be sold by the creditors, leaving the RAM manufacturers hanging dry with unpaid invoices and idle capacity. So they just do the old cartel thing and wait it out - with the added benefit of selling the same stuff they have been making for twice the price!