4 ms·

The AI bubble has increased the prices of nand and ram by a factor of 4, so a 3x increase seems reasonable. Companies that are not big enough to have long ter

The AI bubble has increased the prices of nand and ram by a factor of 4, so a 3x increase seems reasonable. Companies that are not big enough to have long term contracts with ram/nand vendors have been hit really, really hard by this.

Aissen 3mo ago
It's a bit higher than 4 now.
- microtonal 3mo ago
  They probably also have to factor in the pricing trajectory to avoid changing their pricing too often.
- magicalhippo 3mo ago
  I almost pulled the trigger on a 2x64GB 6400MHz CL36 kit for about $650 last August. It's been insane since the spike happened, but went down somewhat last month. I just checked and it has gone up $1500 since then to $5000. So that's over 7.5x what it was when I (sadly) did not buy it. Totally not kicking myself for dragging my heels on that purchase... Cheapest 2x48GB kit I can find here now is $1500, yay. That's 5200MHz CL48 stuff.
WhereIsTheTruth 3mo ago
There is no AI bubble There is an engineered scarcity, billion dollar companies can't ramp up production? Murica is stuck depending on the good will of Korea and China for thinking rocks? le fucking mao
- duttish 3mo ago
  As I understand it ramping up a new fab takes a couple of years and several billion dollars. The last time they ramped up production prices had crashed back down by the the time the new fab was fully up and running, so this time they're betting that the scarcity will resolve itself like it did last time.
  - gmerc 3mo ago
    They are not ramping up.
    - mrweasel 3mo ago
      Because they think it may be a bubble. If it's not, no harm done to the hardware manufacturers, they just make more money per unit, but if it is a bubble, they don't want to be stranded with excess capacity.
      - dabinat 3mo ago
        There is potential harm if it’s not a bubble and their competitors scale and capture more of the market and they don’t. That’s why CXMT is a real wildcard - they could use this situation to become a big player.
        chadgpt3 3mo ago
        Or even if it is a bubble and we all develop brand loyalty to the competitors who scaled.
    - Sohcahtoa82 3mo ago
      I'm trying to understand the intent of your comment. The person you're replying to explained why they're not ramping up, and you replied "They are not ramping up", which seems awfully silly.
  - benjiro29 3mo ago
    They are scaling up, but most will only come online in end 2027-2028 time frame. And Memory, as in what we use in PCs is easier to manufacture then HBM memory. But all the money is in HBM ... So for every ~4GB of memory that you can produce in normal DDR5, you can only make 1GB of HBM. But you make multiple times the revenue. The demand for HBM memory is not going to go away. LLMs are memory bandwidth hungry, and we are going to see production going to AI. But also to "lower end" like B200's. That means, they are producing multiple times less memory (if we look for the normal market demand), but still need to produce more for the memory bandwidth hungry market. We are seeing more products entering the "prosumer/business" market that are also memory bandwidth hungry. This demand will not go away. It will actually increase as companies move to more localized workloads. There is is a issue with data privacy that a lot of companies legally deal with. The lacking ramp up is not a sign of them being scared of over production, its a realization that 3 companies hold the market in a strangle hold, and "slow" scale. If everybody plays friendly, they can milk this for years. China is a solution but China does not have the HBM production levels, and will take years to scale and put a dent in the market. And China is ... allocating a lot to domestic production of AI > HBM ... The reality is, that unless competition ( as in China ) does not start scaling beyond the expected levels, the big 3 have no reason to scale too fast. And money is not the issue ... have you seen their revenue (and net profit!! ) numbers. A few billions is peanuts for them at this point. They simply do not want to scale too fast because that means less milking ... Memory demand is not going to away. When people talk about the AI bubble popping, its more in terms of the stock market. The product is here and not going away.
- dindunuf 3mo ago
  >billion dollar companies can't ramp up production? you're a semiconductor manufacturer who wants to take advantage of the current boom. your options are: A) invest a hundred cubic meters of money into doubling your manufacturing capacity B) raise prices by 100% I can't really blame them for going with B. the blame lies entirely with America's ability to invest billions of its infinite money into companies that make no profit now and have no plausible path to profitability in the future.
  - bloppe 3mo ago
    They are doing all of the above. Investment in new memory fabs is booming. It just takes a little while to get chips out the door.
  - WhereIsTheTruth 3mo ago
    [flagged]
- rcxdude 3mo ago
  All the money in the world won't spin up a fab in a year, much like all the women in the world couldn't take a child from conception to birth in a month. Some things do just have a latency to them.
benjiro29 3mo ago
These prices have absolute nothing to do anymore with memory prices. Do not forget that Hetzner already increased the setup fees by a factor of 4x before to compensate for the price. And also servers getting price increases. It seems they have shifted by reducing the setup fees, and increasing the monthly costs. As this generates more revenue. And its easy to prove this... AX42 ... Its 8700GE that has gone from 65 Euro to 225 Euro. With the setup fee now being 112 Euro instead of 225 Euro. It has 64GB memory, and 1TB storage. The storage even in todays market is 100 Euro. The memory is 644 Euro. Do the math ... Hetzner servers had a hardware payback periode of between 9 to 11 month if you took the market value. This calculation has always been very stable over the 20 years i used Hetzner. This new price, reduced the hardware payback periode to ~4 month. It seems to be that Hetzer is trying to use the memory price issues, as a excuse. The revenue of those same servers now increased to a insane level. More revenue with less hardware. The real issue is that a lot of companies are moving from US hosting to EU hosting because of the problems with the US. Hetzner sees this as the perfect time to cash in on Enterprise customers. They have been trying to replace the "cheap" normal consumers with enterprise. This trend has been going on for a while already. Every customer that now leaves, is a server they can rent out to business customers. If you want to see the same thing, look up what happened to Microsoft/Github Copilot where they turn around has been sudden and very strong, with a clear goal of moving everything to enterprise.
- mschuster91 3mo ago
  > It seems they have shifted by reducing the setup fees, and increasing the monthly costs. Monthly costs have gone up as well. Payroll has seen significant increases in Germany, construction has exploded far beyond inflation and, most importantly, electricity prices are still ridiculous due to merit-order and the refusal of splitting up Germany into multiple power pricing regions.
  - benjiro29 3mo ago
    I remember the price increase that Hetzner did during 2022 because of the invasion in Ukraine. The said they will adjust the prices down when the electricity price reduced. Guess what? I am paying as a consumer about the same price as before 2022. Did Hetzner change their price down? Remember, the industrial price also dropped (and they also build out a large solar plant). No ... Ok, inflation? But those price increases already covered part of that... Just saying, its not been the first price increase that happened. There have been multiple ones that Hetzner did over the years. Some flew under people radars. > Payroll has seen significant increases in Germany, Yea, we have seen nothing of that increase... O, wait, they reduce our income because the social security increase their costs. Yay ..
MagicMoonlight 3mo ago
[dead]
thisisit 3mo ago
Its not only RAM. I have seen people who are vibe coding their app and instead of choosing Vercel as default they are learning about dedicated server hosting, docker etc and moving to providers like Hetzner. This is why whenever someone says - with AI everyone is going to write their own SaaS, I am always like - and what happens to hosting? Even Vercel might increase their costs if that comes to pass.

Aissen 3mo ago

It's a bit higher than 4 now.

microtonal 3mo ago
They probably also have to factor in the pricing trajectory to avoid changing their pricing too often.
magicalhippo 3mo ago
I almost pulled the trigger on a 2x64GB 6400MHz CL36 kit for about $650 last August. It's been insane since the spike happened, but went down somewhat last month. I just checked and it has gone up $1500 since then to $5000. So that's over 7.5x what it was when I (sadly) did not buy it. Totally not kicking myself for dragging my heels on that purchase... Cheapest 2x48GB kit I can find here now is $1500, yay. That's 5200MHz CL48 stuff.

WhereIsTheTruth 3mo ago

There is no AI bubble There is an engineered scarcity, billion dollar companies can't ramp up production? Murica is stuck depending on the good will of Korea and China for thinking rocks? le fucking mao

duttish 3mo ago
As I understand it ramping up a new fab takes a couple of years and several billion dollars. The last time they ramped up production prices had crashed back down by the the time the new fab was fully up and running, so this time they're betting that the scarcity will resolve itself like it did last time.
- gmerc 3mo ago
  They are not ramping up.
  - mrweasel 3mo ago
    Because they think it may be a bubble. If it's not, no harm done to the hardware manufacturers, they just make more money per unit, but if it is a bubble, they don't want to be stranded with excess capacity.
    - dabinat 3mo ago
      There is potential harm if it’s not a bubble and their competitors scale and capture more of the market and they don’t. That’s why CXMT is a real wildcard - they could use this situation to become a big player.
      - chadgpt3 3mo ago
        Or even if it is a bubble and we all develop brand loyalty to the competitors who scaled.
  - Sohcahtoa82 3mo ago
    I'm trying to understand the intent of your comment. The person you're replying to explained why they're not ramping up, and you replied "They are not ramping up", which seems awfully silly.
- benjiro29 3mo ago
  They are scaling up, but most will only come online in end 2027-2028 time frame. And Memory, as in what we use in PCs is easier to manufacture then HBM memory. But all the money is in HBM ... So for every ~4GB of memory that you can produce in normal DDR5, you can only make 1GB of HBM. But you make multiple times the revenue. The demand for HBM memory is not going to go away. LLMs are memory bandwidth hungry, and we are going to see production going to AI. But also to "lower end" like B200's. That means, they are producing multiple times less memory (if we look for the normal market demand), but still need to produce more for the memory bandwidth hungry market. We are seeing more products entering the "prosumer/business" market that are also memory bandwidth hungry. This demand will not go away. It will actually increase as companies move to more localized workloads. There is is a issue with data privacy that a lot of companies legally deal with. The lacking ramp up is not a sign of them being scared of over production, its a realization that 3 companies hold the market in a strangle hold, and "slow" scale. If everybody plays friendly, they can milk this for years. China is a solution but China does not have the HBM production levels, and will take years to scale and put a dent in the market. And China is ... allocating a lot to domestic production of AI > HBM ... The reality is, that unless competition ( as in China ) does not start scaling beyond the expected levels, the big 3 have no reason to scale too fast. And money is not the issue ... have you seen their revenue (and net profit!! ) numbers. A few billions is peanuts for them at this point. They simply do not want to scale too fast because that means less milking ... Memory demand is not going to away. When people talk about the AI bubble popping, its more in terms of the stock market. The product is here and not going away.
dindunuf 3mo ago
>billion dollar companies can't ramp up production? you're a semiconductor manufacturer who wants to take advantage of the current boom. your options are: A) invest a hundred cubic meters of money into doubling your manufacturing capacity B) raise prices by 100% I can't really blame them for going with B. the blame lies entirely with America's ability to invest billions of its infinite money into companies that make no profit now and have no plausible path to profitability in the future.
- bloppe 3mo ago
  They are doing all of the above. Investment in new memory fabs is booming. It just takes a little while to get chips out the door.
- WhereIsTheTruth 3mo ago
  [flagged]
rcxdude 3mo ago
All the money in the world won't spin up a fab in a year, much like all the women in the world couldn't take a child from conception to birth in a month. Some things do just have a latency to them.

benjiro29 3mo ago

These prices have absolute nothing to do anymore with memory prices. Do not forget that Hetzner already increased the setup fees by a factor of 4x before to compensate for the price. And also servers getting price increases. It seems they have shifted by reducing the setup fees, and increasing the monthly costs. As this generates more revenue. And its easy to prove this... AX42 ... Its 8700GE that has gone from 65 Euro to 225 Euro. With the setup fee now being 112 Euro instead of 225 Euro. It has 64GB memory, and 1TB storage. The storage even in todays market is 100 Euro. The memory is 644 Euro. Do the math ... Hetzner servers had a hardware payback periode of between 9 to 11 month if you took the market value. This calculation has always been very stable over the 20 years i used Hetzner. This new price, reduced the hardware payback periode to ~4 month. It seems to be that Hetzer is trying to use the memory price issues, as a excuse. The revenue of those same servers now increased to a insane level. More revenue with less hardware. The real issue is that a lot of companies are moving from US hosting to EU hosting because of the problems with the US. Hetzner sees this as the perfect time to cash in on Enterprise customers. They have been trying to replace the "cheap" normal consumers with enterprise. This trend has been going on for a while already. Every customer that now leaves, is a server they can rent out to business customers. If you want to see the same thing, look up what happened to Microsoft/Github Copilot where they turn around has been sudden and very strong, with a clear goal of moving everything to enterprise.

mschuster91 3mo ago
> It seems they have shifted by reducing the setup fees, and increasing the monthly costs. Monthly costs have gone up as well. Payroll has seen significant increases in Germany, construction has exploded far beyond inflation and, most importantly, electricity prices are still ridiculous due to merit-order and the refusal of splitting up Germany into multiple power pricing regions.
- benjiro29 3mo ago
  I remember the price increase that Hetzner did during 2022 because of the invasion in Ukraine. The said they will adjust the prices down when the electricity price reduced. Guess what? I am paying as a consumer about the same price as before 2022. Did Hetzner change their price down? Remember, the industrial price also dropped (and they also build out a large solar plant). No ... Ok, inflation? But those price increases already covered part of that... Just saying, its not been the first price increase that happened. There have been multiple ones that Hetzner did over the years. Some flew under people radars. > Payroll has seen significant increases in Germany, Yea, we have seen nothing of that increase... O, wait, they reduce our income because the social security increase their costs. Yay ..

MagicMoonlight 3mo ago

[dead]

thisisit 3mo ago

Its not only RAM. I have seen people who are vibe coding their app and instead of choosing Vercel as default they are learning about dedicated server hosting, docker etc and moving to providers like Hetzner. This is why whenever someone says - with AI everyone is going to write their own SaaS, I am always like - and what happens to hosting? Even Vercel might increase their costs if that comes to pass.