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No, completely wrong. Supply and demand will definitely fix this. More HBM4 will drive the price of it down. That will make it less profitable to produce. That

by chr15m 5d ago

No, completely wrong. Supply and demand will definitely fix this. More HBM4 will drive the price of it down. That will make it less profitable to produce. That will mean firms shift some production back to more profitable "consumer" RAM. Increased supply will lead to lower prices. A shortage is always followed by a glut.

no-name-here 5d ago
> That will mean firms shift some production back to more profitable "consumer" RAM. Increased supply will lead to lower prices. Long-term, sure. But the article we are discussing is about next year, non-HBM supply going from 60% of their output to 20% (HBM 40%→80%).
- chr15m 5d ago
  > Long-term, sure. Yes. Non-HBM Samsung supply going from 60% to 20% will cause prices to increase, which will cause increased production of non-HBM, and then prices will fall (below where they currently are).
Dylan16807 5d ago
What specifically did that say that you think is wrong? Supply is currently moving the wrong way. Supply and demand for consumer DRAM will get even worse, even if it will "definitely fix this" in the long run. And the fact that production is moving the wrong way suggests that in the short term supply and demand is actually doing more harm than good. HBM is so profitable it's radioactive. I don't know where you got the idea in another comment that all memory will get "very cheap quite soon". They're not increasing total memory production. (much/yet)
- chr15m 5d ago
  > What specifically did that say that you think is wrong? You said: > the market doesn't fit the issue. I presume you meant "fix" not "fit". You are wrong that the market will not fix the issue. There are literally millions of observed cases across many markets of increased demand (or decreased supply) leading to higher prices leading to increased supply leading to lower prices, which is why it's a fundamental law of economics. The price of RAM will fall.
  - Dylan16807 5d ago
    > You said: That wasn't me. Also they're talking about the short to medium term. On that time scale they're not wrong. The market is so far from fixing it right now, it's going in the opposite direction. The market is chasing HBM money which is outbidding everything else. > The price of RAM will fall. And if that might take 5+ years, that's not much comfort. > higher prices leading to increased supply leading to lower prices So far higher prices are causing barely any supply increases. (Note that the article we're commenting on is about a supply decrease.) Companies are barely trying to expand, and even if they do start trying hard it'll take a very long time.
  - eek2121 5d ago
    I feel like everyone here forgets that the DRAM industry is operated by one big cartel. The rules of supply and demand don't apply here. Now that prices are up, they will keep it up, cutting supply as needed in order to do so. Every big DRAM manufacturer in the industry has been charged with price fixing, among other things: https://en.wikipedia.org/wiki/DRAM_industry_price_fixing https://en.wikipedia.org/wiki/DRAM_industry_price_fixing There are so few players in this space they can coordinate and collude pretty easily.
    - Melatonic 5d ago
      DRAM isn't nearly as hard to get into as compute. The price fixing stuff is going to bite them in the ass someday soon by massively increasing the incentives for new players to enter the market and compete.
- Melatonic 5d ago
  China is about to massively compete. And doesn't Micron and someone else have new fabs in NY coming online ? I can't imagine they're going to exclusively make HBM. Ram always goes through these boom and bust cycles. They're going to increase supply but not so much that they're eventually left with huge overproduction as usual. Of course if Google researchers come up with more ram reduction tricks for newer AI architectures that could make a huge difference as well
  - Dylan16807 5d ago
    I don't expect China to be a particularly large competitor in the next year or two affected by the decision in the article, but they'll help a lot in the long run. Micron's NY fab had a press release two months ago that they started pouring the first concrete, so that's far from coming online. If AI demand sticks around and buildouts stay cautious it could take much much longer than usual to build up enough capacity to push prices back down below $3/GB. More efficient AI memory use risks even more demand for memory because you're now able to get even more performance per dollar; the benefit of extra memory has to be sufficiently far into diminishing returns for demand to drop overall.

by chr15m 5d ago

no-name-here 5d ago

> That will mean firms shift some production back to more profitable "consumer" RAM. Increased supply will lead to lower prices. Long-term, sure. But the article we are discussing is about next year, non-HBM supply going from 60% of their output to 20% (HBM 40%→80%).

chr15m 5d ago
> Long-term, sure. Yes. Non-HBM Samsung supply going from 60% to 20% will cause prices to increase, which will cause increased production of non-HBM, and then prices will fall (below where they currently are).

Dylan16807 5d ago

What specifically did that say that you think is wrong? Supply is currently moving the wrong way. Supply and demand for consumer DRAM will get even worse, even if it will "definitely fix this" in the long run. And the fact that production is moving the wrong way suggests that in the short term supply and demand is actually doing more harm than good. HBM is so profitable it's radioactive. I don't know where you got the idea in another comment that all memory will get "very cheap quite soon". They're not increasing total memory production. (much/yet)

chr15m 5d ago
> What specifically did that say that you think is wrong? You said: > the market doesn't fit the issue. I presume you meant "fix" not "fit". You are wrong that the market will not fix the issue. There are literally millions of observed cases across many markets of increased demand (or decreased supply) leading to higher prices leading to increased supply leading to lower prices, which is why it's a fundamental law of economics. The price of RAM will fall.
- Dylan16807 5d ago
  > You said: That wasn't me. Also they're talking about the short to medium term. On that time scale they're not wrong. The market is so far from fixing it right now, it's going in the opposite direction. The market is chasing HBM money which is outbidding everything else. > The price of RAM will fall. And if that might take 5+ years, that's not much comfort. > higher prices leading to increased supply leading to lower prices So far higher prices are causing barely any supply increases. (Note that the article we're commenting on is about a supply decrease.) Companies are barely trying to expand, and even if they do start trying hard it'll take a very long time.
- eek2121 5d ago
  I feel like everyone here forgets that the DRAM industry is operated by one big cartel. The rules of supply and demand don't apply here. Now that prices are up, they will keep it up, cutting supply as needed in order to do so. Every big DRAM manufacturer in the industry has been charged with price fixing, among other things: https://en.wikipedia.org/wiki/DRAM_industry_price_fixing https://en.wikipedia.org/wiki/DRAM_industry_price_fixing There are so few players in this space they can coordinate and collude pretty easily.
  - Melatonic 5d ago
    DRAM isn't nearly as hard to get into as compute. The price fixing stuff is going to bite them in the ass someday soon by massively increasing the incentives for new players to enter the market and compete.
Melatonic 5d ago
China is about to massively compete. And doesn't Micron and someone else have new fabs in NY coming online ? I can't imagine they're going to exclusively make HBM. Ram always goes through these boom and bust cycles. They're going to increase supply but not so much that they're eventually left with huge overproduction as usual. Of course if Google researchers come up with more ram reduction tricks for newer AI architectures that could make a huge difference as well
- Dylan16807 5d ago
  I don't expect China to be a particularly large competitor in the next year or two affected by the decision in the article, but they'll help a lot in the long run. Micron's NY fab had a press release two months ago that they started pouring the first concrete, so that's far from coming online. If AI demand sticks around and buildouts stay cautious it could take much much longer than usual to build up enough capacity to push prices back down below $3/GB. More efficient AI memory use risks even more demand for memory because you're now able to get even more performance per dollar; the benefit of extra memory has to be sufficiently far into diminishing returns for demand to drop overall.