3 ms·

Would they? Cartels aren't known for massively increasing production to satisfy all demand. Far from it I'd say, they're more likely to expand supply to such a

by mschild 1mo ago

Would they? Cartels aren't known for massively increasing production to satisfy all demand. Far from it I'd say, they're more likely to expand supply to such a level that they can still reap massive profits. Very few countries/companies have the knowhow and willingness to be able to build more. OPEC is a perfect example of this behaviour. They set hearly production goals to keep prices high. Or the Quebec Maple Syrup Producers organization that limits the amount of syrup a farmer can produce and sell in a year to keep prices high.

deleted 1mo ago
[deleted]
AnimalMuppet 1mo ago
But are the memory chip producers acting like a cartel? In the past they have not. When there was a shortage, they increased production as rapidly as they could build the new fabs, crashing the price of memory.
- nemomarx 1mo ago
  Wasn't that bad for business last time? I could see them erring on slower build up because of how it went before, if they're not sure how long this demand will last especially
  - XorNot 1mo ago
    Which is exactly what's happening. There used to be a lot more then 3 makers but up till very recently memory was a comedically low margin business you didn't go into.
- officeplant 1mo ago
  >In the past they have not. Well guess what :) They've done it before, they will do it again. "To date, five manufacturers have pleaded guilty to their involvement in an international price-fixing conspiracy between July 1, 1998, and June 15, 2002, including Hynix, Infineon, Micron Technology, Samsung, and Elpida.[1]" [1]https://en.wikipedia.org/wiki/DRAM_industry_price_fixing https://en.wikipedia.org/wiki/DRAM_industry_price_fixing
  - throw10920 1mo ago
    That was 24 years ago. Half the people commenting on this board aren't even that old. How many of the shareholders on the boards or executives at the helms of those companies do you think are still there?
- xenadu02 1mo ago
  As others have noted they've been found colluding previously, more than once. Even admitted guilt and some people went to jail over it. And the reason the market is so small is because of players who did as you propose, the DRAM market crashed on them (not due to them but due to broader market dynamics), and they went out of business. So there is, quite perversely, strong incentive to collude if possible and if not to abide by an unstated agreement to be extremely slow to expand DRAM capacity. That said... SK Hynix has two fabs under construction, one set to open later this year. One for 80k wpm, another 360k wpm. A third was recently approved to start construction. Micro has an overhaul of Fab 6 in Virgina near done and slated to produce first wafers this year. It also has a large expansion in Boise nearly completion for 300k wpm. They're also building a "megafab" site in New York (my guess is >1m wpm) and expanding at their Japanese plants (40k wpm). Samsung has two under construction, P4 for 100k wpm. Nanya - historically a secondary player focused only on producing non-leading-edge DRAM is making a play for the leading-edge market with a new fab dedicated to DDR5 and HBM. It appears they've all decided that the demand is sufficiently sustained that building new fabs is worth doing... but it takes time. If my guess is right Micron is making the largest play with their New York site at 1-1.5m wafers per month. That would give them a large chunk of the market. (wpm = wafers per month)
Onavo 1mo ago
> Cartels aren't known for massively increasing production to satisfy all demand. Don't worry they will leave money on the table and lobby for protectionism when china comes and eats their lunch.
handedness 1mo ago
> OPEC is a perfect example of this behaviour. It really is. First thing I searched for in the thread.
Hamuko 1mo ago
OPEC's aim isn't to keep prices as high as possible. If they go too high, people will start buying electric cars, investing in renewable energy, etc. Basically they want to make oil as expensive as possible while preventing it from getting so expensive that it's disruptive.
- mschild 1mo ago
  OPEC's goal is as much profit as possible. They're not thinking in the short term but long term. If as much possible means over the span of multiple centuries then that's what they're going for. I think we're in agreement here. I don't think memory manufacturers are interested in a market disruption even though profits are incredibly high for a few years. Make it too profitable for too long and others will arise but keep the supply at a steady pace with decent margins and they will remain the only ones on the block because of massive upfront cost. China is, to my knowledge, the only country that has so far had the willingness to seriously invest. Not necessarily for profits but for independence reasons. I don't see many (or any really) other countries following suit.
qurren 1mo ago
> Quebec Maple Syrup Producers organization Can you just not join the organization? Maple trees are living things and have a right to reproduce, you can't fault a bird for shitting maple seeds all over my farm planting maple trees everywhere.
- scorpioxy 1mo ago
  I saw a documentary(forgot the name, sorry) about that that said, no you can't choose not to join. I forgot if it was about this organization but it was about maple production in Canada where a farmer wanted to do their own thing and they were intimidated and all sorts of nasty things happen to them because they didn't think the org was just and wanted to sell freely. Very interesting documentary and an eye opener that even farmer unions can act like organized crime when there's money involved.
- baby_souffle 1mo ago
  > you can't fault a bird for shitting maple seeds all over my farm planting maple trees everywhere. If only building a ram FAB was that easy :). The best hope is that cxmt gets going quicker than expected and is able to satisfy a decent chunk of the Chinese demand for RAM which would - in theory - reduce the demand for ram from the few other producers.
- autoexec 1mo ago
  It looks like you're forced to participate by law once you sell over a certain volume. > Backed by the Canadian civil courts, the federation has the monopoly for selling Quebecois maple syrup on the wholesale market, and for exporting it outside the province. Producers are only allowed to sell independently cans of less than five litres or 5kg to visitors to their farm. https://www.bbc.com/news/business-35028380 https://www.bbc.com/news/business-35028380
whattheheckheck 1mo ago
Can you list out the precise "cartel" company, their supply chains and the board of directors, their financial and political ties? Lot of unsubstantiated claims with low fidelity meme evidence
- jodrellblank 1mo ago
  https://en.wikipedia.org/wiki/DRAM_industry_price_fixing https://en.wikipedia.org/wiki/DRAM_industry_price_fixing
- SturgeonsLaw 1mo ago
  There's details in the class action lawsuit https://stream-ai.s3.us-west-1.amazonaws.com/class-action-complaints/6-25-26/Garciaguirre_et_al_v_Samsung_Electronics_Co_Ltd_et__candce-26-06345__0001.0.pdf https://stream-ai.s3.us-west-1.amazonaws.com/class-action-co...
Gareth321 1mo ago
You're correct in theory. I'm just not sure we have a cartel situation. Micron is a US company, and it controls 25% of the global market. I see no evidence that they nor SK hynix nor Samsung are intentionally limiting production. I do see people arguing, "they had years to increase production - why didn't they?" They've been remarkably candid about this: because RAM production has been losing them money in the past. Because they don't have a cartel, prices were on the floor. Investing in more production would have been corporate suicide. Even now, there is considerable risk that the bubble will burst, and all this investment in new production will be flushed down the toilet. RAM production is a brutal business.

by mschild 1mo ago

deleted 1mo ago

[deleted]

AnimalMuppet 1mo ago

But are the memory chip producers acting like a cartel? In the past they have not. When there was a shortage, they increased production as rapidly as they could build the new fabs, crashing the price of memory.

nemomarx 1mo ago
Wasn't that bad for business last time? I could see them erring on slower build up because of how it went before, if they're not sure how long this demand will last especially
- XorNot 1mo ago
  Which is exactly what's happening. There used to be a lot more then 3 makers but up till very recently memory was a comedically low margin business you didn't go into.
officeplant 1mo ago
>In the past they have not. Well guess what :) They've done it before, they will do it again. "To date, five manufacturers have pleaded guilty to their involvement in an international price-fixing conspiracy between July 1, 1998, and June 15, 2002, including Hynix, Infineon, Micron Technology, Samsung, and Elpida.[1]" [1]https://en.wikipedia.org/wiki/DRAM_industry_price_fixing https://en.wikipedia.org/wiki/DRAM_industry_price_fixing
- throw10920 1mo ago
  That was 24 years ago. Half the people commenting on this board aren't even that old. How many of the shareholders on the boards or executives at the helms of those companies do you think are still there?
xenadu02 1mo ago
As others have noted they've been found colluding previously, more than once. Even admitted guilt and some people went to jail over it. And the reason the market is so small is because of players who did as you propose, the DRAM market crashed on them (not due to them but due to broader market dynamics), and they went out of business. So there is, quite perversely, strong incentive to collude if possible and if not to abide by an unstated agreement to be extremely slow to expand DRAM capacity. That said... SK Hynix has two fabs under construction, one set to open later this year. One for 80k wpm, another 360k wpm. A third was recently approved to start construction. Micro has an overhaul of Fab 6 in Virgina near done and slated to produce first wafers this year. It also has a large expansion in Boise nearly completion for 300k wpm. They're also building a "megafab" site in New York (my guess is >1m wpm) and expanding at their Japanese plants (40k wpm). Samsung has two under construction, P4 for 100k wpm. Nanya - historically a secondary player focused only on producing non-leading-edge DRAM is making a play for the leading-edge market with a new fab dedicated to DDR5 and HBM. It appears they've all decided that the demand is sufficiently sustained that building new fabs is worth doing... but it takes time. If my guess is right Micron is making the largest play with their New York site at 1-1.5m wafers per month. That would give them a large chunk of the market. (wpm = wafers per month)

Onavo 1mo ago

> Cartels aren't known for massively increasing production to satisfy all demand. Don't worry they will leave money on the table and lobby for protectionism when china comes and eats their lunch.

handedness 1mo ago

> OPEC is a perfect example of this behaviour. It really is. First thing I searched for in the thread.

Hamuko 1mo ago

OPEC's aim isn't to keep prices as high as possible. If they go too high, people will start buying electric cars, investing in renewable energy, etc. Basically they want to make oil as expensive as possible while preventing it from getting so expensive that it's disruptive.

mschild 1mo ago
OPEC's goal is as much profit as possible. They're not thinking in the short term but long term. If as much possible means over the span of multiple centuries then that's what they're going for. I think we're in agreement here. I don't think memory manufacturers are interested in a market disruption even though profits are incredibly high for a few years. Make it too profitable for too long and others will arise but keep the supply at a steady pace with decent margins and they will remain the only ones on the block because of massive upfront cost. China is, to my knowledge, the only country that has so far had the willingness to seriously invest. Not necessarily for profits but for independence reasons. I don't see many (or any really) other countries following suit.

qurren 1mo ago

> Quebec Maple Syrup Producers organization Can you just not join the organization? Maple trees are living things and have a right to reproduce, you can't fault a bird for shitting maple seeds all over my farm planting maple trees everywhere.

scorpioxy 1mo ago
I saw a documentary(forgot the name, sorry) about that that said, no you can't choose not to join. I forgot if it was about this organization but it was about maple production in Canada where a farmer wanted to do their own thing and they were intimidated and all sorts of nasty things happen to them because they didn't think the org was just and wanted to sell freely. Very interesting documentary and an eye opener that even farmer unions can act like organized crime when there's money involved.
baby_souffle 1mo ago
> you can't fault a bird for shitting maple seeds all over my farm planting maple trees everywhere. If only building a ram FAB was that easy :). The best hope is that cxmt gets going quicker than expected and is able to satisfy a decent chunk of the Chinese demand for RAM which would - in theory - reduce the demand for ram from the few other producers.
autoexec 1mo ago
It looks like you're forced to participate by law once you sell over a certain volume. > Backed by the Canadian civil courts, the federation has the monopoly for selling Quebecois maple syrup on the wholesale market, and for exporting it outside the province. Producers are only allowed to sell independently cans of less than five litres or 5kg to visitors to their farm. https://www.bbc.com/news/business-35028380 https://www.bbc.com/news/business-35028380

whattheheckheck 1mo ago

Can you list out the precise "cartel" company, their supply chains and the board of directors, their financial and political ties? Lot of unsubstantiated claims with low fidelity meme evidence

jodrellblank 1mo ago
https://en.wikipedia.org/wiki/DRAM_industry_price_fixing https://en.wikipedia.org/wiki/DRAM_industry_price_fixing
SturgeonsLaw 1mo ago
There's details in the class action lawsuit https://stream-ai.s3.us-west-1.amazonaws.com/class-action-complaints/6-25-26/Garciaguirre_et_al_v_Samsung_Electronics_Co_Ltd_et__candce-26-06345__0001.0.pdf https://stream-ai.s3.us-west-1.amazonaws.com/class-action-co...

Gareth321 1mo ago

You're correct in theory. I'm just not sure we have a cartel situation. Micron is a US company, and it controls 25% of the global market. I see no evidence that they nor SK hynix nor Samsung are intentionally limiting production. I do see people arguing, "they had years to increase production - why didn't they?" They've been remarkably candid about this: because RAM production has been losing them money in the past. Because they don't have a cartel, prices were on the floor. Investing in more production would have been corporate suicide. Even now, there is considerable risk that the bubble will burst, and all this investment in new production will be flushed down the toilet. RAM production is a brutal business.