undefined

points

[-]

The ~$1T/y AI capex isn't remotely sustainable. Memory fab capacity will go up, AI datacenter provisioning will go down, prices will become reasonable.

by 80fj0348i16 hours ago|

parent|

[-]

> Memory fab capacity will go up

The fabs are terrified to overscale in case the market collapses before the builds are complete.

> AI datacenter provisioning will go down

Depends on political opposition at both local and national levels. Hard to predict the future, which feeds into the previous point.

by asdff16 hours ago|

parent|

[-]

What is it with fabs where there is just no competition springing up outside the existing memory cartels? Is the knowledge of how to build and run a fab strictly controlled by these companies? Is all qualified talent just immediately poached and put behind NDA and noncompetes? It just makes no sense. Capitalism would suggest these conditions with so much unstable equilibrium in this market would see increase in supply to take advantage of the pricing. The fact that this isn't playing out as such suggests there are some very powerful thumbs on the scale of this "free" market.

by colechristensen15 hours ago|

parent|

[-]

It takes about a decade to bring one up and during EVERY wave of a booming memory demand supply crunch there has been a subsequent round of major bankruptcies from suppliers who decided to scale and had no demand when they finally got online.

Supply is not elastic and responds very much slower than demand. There's no conspiracy or corruption needed for this result.

by kbolino12 hours ago|

parent|

[-]

The conspiracy is real, it's even been proven in court, but as things stand, it's also necessary because of the factors you describe. Investors will not touch the DRAM market with a 10-foot pole, so it has had to rely on self-funding. While there have been state subsidies too, price fixing has proven to be the most effective way to survive the extreme volatility and fund the massive capex necessary for each generational leap. They have gotten a bit more sophisticated about it since the court case 20 years ago, but as far as I can tell, it's basically the same as it's ever been. The lack of effective competition is a function of the market itself, not any tilted scales. If anything, tilting the scales on purpose with greater state involvement is the only way to change the dynamics, but few states have the capacity and competence to carry that out effectively.

by dzhiurgis8 hours ago|

parent|

[-]

> Investors will not touch the DRAM market with a 10-foot pole

Have you not seen Micron or Sandisk stock?

by kbolino6 hours ago|

parent|

[-]

Sandisk doesn't make DRAM.

Micron's stock price did go way up, after they stopped selling DRAM to the consumer market. It has been flat for several months though.

For comparison, SK Hynix stock is flat YoY and Samsung's stock did go up this year, but has come back down a bit (they're also much more diversified). Those are the only other companies outside of China that actually make DRAM at scale. There's also CXMT, which is making inroads, but its stock is not traded on any open markets, and the company is heavily backed by the Chinese government.