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Unless the raw materials have an inherent limit on mining/production due to the amount present on the planet, why should or would companies not ramp up to event

by msdz 3mo ago

Unless the raw materials have an inherent limit on mining/production due to the amount present on the planet, why should or would companies not ramp up to eventually meet demand? Edit: Okay, this doesn’t mean that that’s actually possible in the short-term, so I think you’re right. But that means as the silver lining, in the medium term horizon there’ll be enough supply again? :’)

JumpCrisscross 3mo ago
> why should or would companies not ramp up to eventually meet demand? Memory is a cyclical market that has historically rewarded conservatism [1]. Counterpoint: there is enough demand from enough capital-rich customers that they may be willing to shoulder the capital risk. [1] https://www.ldeepai.com/tech-hub/dram-industry-consolidation-three-survivors-memory-scale/#:~:text=The%20DRAM%20industry,memory%20inevitably%20consolidates https://www.ldeepai.com/tech-hub/dram-industry-consolidation... Sorry for the slop link, it has a good chart from a solid source
- msdz 3mo ago
  Thanks for the link (and underlying thoughts), I really hadn’t considered that. So essentially, due to technological progress and other factors inducing price collapses (or at least cycles), you can’t start stockpiling insane amounts of finished-product semiconductor, which means you can’t scale production at current technology levels to infinity either?
- AussieWog93 3mo ago
  I heard that China was spinning up DDR5 (but not HBM?) production in the next couple of years, with the hope of outcompeting Korea and Taiwan in the mid to long term.
  - HPsquared 3mo ago
    It does seem like an opportunity on a silver platter for Chinese newcomers. Huge demand at the moment.
    - Danox 3mo ago
      In two to four years, the Chinese will have at least half the memory market worldwide, and once in, they will continue forward and not look back. I also believe there would be one or two tech companies that will get into memory by taking it in-house to make sure that they won’t have this problem again in the future.
- djfergus 3mo ago
  [dead]
- techpression 3mo ago
  Don't forget price fixing [1] which we are seeing clear indicators of happening right now too. [1] https://en.wikipedia.org/wiki/DRAM_price_fixing_scandal https://en.wikipedia.org/wiki/DRAM_price_fixing_scandal
- wongarsu 3mo ago
  For existing producers expanding capacity would be a risky move. But it's the perfect time for any newcomers to enter the market. Low yields and worse product don't matter as much right now, and by the time the market cools down you have everything dialed in and can compete on even ground
  - JumpCrisscross 3mo ago
    > it's the perfect time for any newcomers to enter the market This is a good hypothesis. Curious if anyone has data on the failure rates of new entrants in semiconductors based on how frothy it was on founding. On one hand, more demand makes selling easier. On the other hand, a shortage makes your input costs (consumable and capital) pricier. EDIT: It seems like the 2 to 3 year lead time and a crowding effect from new entrants historically made booting up a fab into a boom a bad bet [1]. (The article argues, convincingly, that this time may be different.) [1] https://www.uncoveralpha.com/p/every-memory-cycle-ends-the-same https://www.uncoveralpha.com/p/every-memory-cycle-ends-the-s...

by msdz 3mo ago

JumpCrisscross 3mo ago

> why should or would companies not ramp up to eventually meet demand? Memory is a cyclical market that has historically rewarded conservatism [1]. Counterpoint: there is enough demand from enough capital-rich customers that they may be willing to shoulder the capital risk. [1] https://www.ldeepai.com/tech-hub/dram-industry-consolidation-three-survivors-memory-scale/#:~:text=The%20DRAM%20industry,memory%20inevitably%20consolidates https://www.ldeepai.com/tech-hub/dram-industry-consolidation... Sorry for the slop link, it has a good chart from a solid source

msdz 3mo ago
Thanks for the link (and underlying thoughts), I really hadn’t considered that. So essentially, due to technological progress and other factors inducing price collapses (or at least cycles), you can’t start stockpiling insane amounts of finished-product semiconductor, which means you can’t scale production at current technology levels to infinity either?
AussieWog93 3mo ago
I heard that China was spinning up DDR5 (but not HBM?) production in the next couple of years, with the hope of outcompeting Korea and Taiwan in the mid to long term.
- HPsquared 3mo ago
  It does seem like an opportunity on a silver platter for Chinese newcomers. Huge demand at the moment.
  - Danox 3mo ago
    In two to four years, the Chinese will have at least half the memory market worldwide, and once in, they will continue forward and not look back. I also believe there would be one or two tech companies that will get into memory by taking it in-house to make sure that they won’t have this problem again in the future.
djfergus 3mo ago
[dead]
techpression 3mo ago
Don't forget price fixing [1] which we are seeing clear indicators of happening right now too. [1] https://en.wikipedia.org/wiki/DRAM_price_fixing_scandal https://en.wikipedia.org/wiki/DRAM_price_fixing_scandal
wongarsu 3mo ago
For existing producers expanding capacity would be a risky move. But it's the perfect time for any newcomers to enter the market. Low yields and worse product don't matter as much right now, and by the time the market cools down you have everything dialed in and can compete on even ground
- JumpCrisscross 3mo ago
  > it's the perfect time for any newcomers to enter the market This is a good hypothesis. Curious if anyone has data on the failure rates of new entrants in semiconductors based on how frothy it was on founding. On one hand, more demand makes selling easier. On the other hand, a shortage makes your input costs (consumable and capital) pricier. EDIT: It seems like the 2 to 3 year lead time and a crowding effect from new entrants historically made booting up a fab into a boom a bad bet [1]. (The article argues, convincingly, that this time may be different.) [1] https://www.uncoveralpha.com/p/every-memory-cycle-ends-the-same https://www.uncoveralpha.com/p/every-memory-cycle-ends-the-s...