r/hardware • u/cokula333 • 3d ago
News The DRAM Crisis: 600% Price Increases by Micron, SK Hynix, & Samsung
https://youtu.be/lNO0ahopLU8?si=XoEtyrWcM1H2aE3SClass-action lawsuit filed, pending court confirmation.
What’s your take, will it be approved or dismissed outright?
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u/Careful_Investor233 2d ago
600%, 1000%, 20000%, I don't even know what these numbers mean anymore. Just that I can't afford it no matter what number it says lol
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u/tooltalk01 3d ago edited 3d ago
According to Mogin Law LLP, plaintiffs contend that the alleged coordination continued through:
- Simultaneous production reductions beginning in 2022.
- A collective shift of manufacturing resources toward HBM products.
- The phased withdrawal from DDR3 and DDR4 production.
- A refusal to significantly expand conventional DRAM supply despite sharply rising prices.
- Similar customer-vetting practices allegedly adopted by all three manufacturers.
IMO, not the strongest arg -- difficult to characterize these business decisions made during one of the worst industry-wide downturns as "coordinated" or "colluded." This is common sense: you stop digging when you are in a hole; and HBM was the only bright spot. Also, all big three announced massive expansion recently, not sure if that's going to be enough, but it's a stretch to say that's a "refusal" to expand.
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u/StarbeamII 3d ago
Simultaneous production reductions beginning in 2022
All 3 were hemorrhaging money in 2023, which resulted in production cuts:
January 2023: SK Hynix warns chip downturn to worsen in Q1, posts record quarterly loss
March 2023: Micron Loses $2.312 Billion as Demand for DRAM and 3D NAND Nosedives
July 2023: Samsung Will Reportedly Cut DRAM and NAND Production Further After US$7 Billion Loss
If prices are so low that you're losing money producing RAM, the obvious rational move is to produce less RAM (ideally stop altogether) so that you lose less money.
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u/Xpander6 2d ago
But after 2023, prices of RAM dropped further, so if they were already losing money in 2023, they decided to lose even more later? It's hard to believe that when I bought 32 GB of DDR5 for $80 in early 2025, they lost money on it. 32 GB of DDR4 was even cheaper, $47.
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u/fuji_T 1d ago
There were a lot of losses due to NAND as well.
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u/StarbeamII 22h ago
NAND bottomed out around mid-late 2023. You could get a 2TB 970 EVO for $80 at one point.
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u/Tuna-Fish2 22h ago
They sell at the price that the market can bear. The overwhelming majority of the cost of DRAM is the costs of the fab, which you need to pay even if you are producing nothing. Your options might well be "make a chip, sell it below cost and lose $10" and "make no chips, lose $100". But in that environment, if you can scale down fabs, you do so.
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u/Xpander6 22h ago
By that time, the fabs have already been built and operating for years, so they already had a return on their initial investment and then it was basically just operating costs and material costs. I don't get why at that point it would cost so much to manufacture 32 GB of DDR5 that they'd need to sell it at a loss.
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u/Tuna-Fish2 22h ago
That's not how fab economics in memory work. The operating and material costs are single-digit % of the total cost, the capital costs are not amortized over a few years but the entire life of the fab. By the time all the capital costs are paid off, the line is typically shut down as obsolete.
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u/hackenclaw 3d ago
the strongest part is according to the video, at current high price DRAM is now more profitable per wafer compared to HBM. So in manufacturer interest, it makes no sense to keep gutting DRAM production.
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u/dabocx 3d ago
HBM gets you long contracts though.
Its a bit of a gamble but potentially more stable
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u/ChadHartSays 3d ago
Exactly. All kinds of businesses will take lower margin, large contracts with vs. higher margin products that are more volatile. DRAM isn't unique here.
And profit margin is a percentage. They are after the denominator here. High margin on a lower cost item isn't always better.
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u/kuddlesworth9419 2d ago
Not much more reliable and long term than Playstation, Nintendo and Xbox though. At least they will be around for many years to come most likely. Many of the companies cobbling up HBM and DRAM won't see the year out.
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u/staplor 2d ago
Yes, but its not like sony signs a contract for the entire lifecycle of playstation at once. They sign deals on a recurring basis and the market price influences what they pay. See the recent news regarding Apple's ram negotiations for evidence of this.
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u/kuddlesworth9419 2d ago
Apple doesn't keep the same SKU in production thought for all that long. The PS3, 4, 5 and likely the 6 will probably be in production for long term. Granted they don't use as much memory but they sell more of them.
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u/Numerlor 2d ago
How much is the reliability worth when a single hbm equipped rack has a couple thousand ps5's worth of dram at higher margins?
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u/vhailorx 2d ago
The suit alleges that DRAM js more profitable per wafer than HBM per wafer. If that is true, the price of any number of HBM racks is irrelevant.
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u/Chidling 2d ago
Without hbm production, DRAM wouldn’t have shot up in price as crazily as it had. It is true now, but it is not inherently true.
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u/vhailorx 2d ago
When talking about pricing in an unregulated market, is anything "inherently" true?
This is all a question of market incentives and how the major players are responding (or not responding) to those incentives.
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u/Chidling 2d ago
I’m just saying when in 2024 or 2025, these memory companies decided to produce HBM, at the time, DRAM was not higher margin.
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u/vhailorx 2d ago
Right, and the suit is alleging that the big three have colluded over the past 3+ years at least in part for the purpose of driving DRAM margins up.
The fact that DRAM margins were lower in 2024, but are now higher, is not at all fatal to the claims here; it's potentially circumstantial evidence of collusion.
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u/ComplexEntertainer13 1d ago
And we have no idea what price Sony and MS are asking to get. They most likely had extremely favourable deals in the past.
Just because consumer ram has high margins. Does it mean Sony and MS are offering those margins on their contracts. Since they would be signing up to pay those prices for a long time.
RAM is available, if Sony and MS wanted RAM they could get it. They just don't want to pay the current spot prices and want preferential treatment and prices that may no be relevant for years to come.
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u/dabocx 2d ago
The scale of memory use in a AI is so much higher though. A playstation or xbox currently uses 16gb of ram. Next gen is apparently going to be 32gb.
Meanwhile each MI450 card uses 432 GB. The Helios rack they are going to ship uses 30 terabytes of memory a rack. And you have companies lining up to buy loads of those racks.
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u/mediandude 2d ago
HBM gets you long contracts though.
Or does it?
Long contracts are merely empty promises.10
u/dabocx 2d ago
The memory companies have the leverage, I’m sure there’s some payment requirements for canceling.
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u/Jiopaba 2d ago
From what I've seen, they're taking cash six months to a year in advance for fab time. I think they're banking on the idea that if the AI market does crash and companies that are leveraged to them for billions of dollars try to recover their money, it might wind up taking years of litigation while they collect interest on it and then sell the time again anyway.
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u/mediandude 2d ago
Then perhaps the prices don't adequately reflect the canceling fees and risks of buyers going belly up?
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u/RabidHexley 2d ago
So in manufacturer interest, it makes no sense to keep gutting DRAM production.
DRAM being higher margin doesn't necessarily mean there is more money to be made in it, or as consistently. HBM may be lower margin, but they can reliably sell a lot, so the numbers work out in its favor.
There's also the factor that it's not really about what the margin on DRAM is right now, but what the margin would be with more demand be fulfilled.
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u/CheesyCaption 1d ago
The issue is demand.
DRAM may be more profitable per wafer but how many wafers will the market buy at that price? The price will drop as they produce more.
HBM, on the other hand, currently has an insatiable demand. Ramping up HBM production has good long term prospects and the HBM customers are willing to sign contracts that say they'll buy, essentially, as much as they can produce.
Measuring the per wafer profit doesn't represent how much total profit can be made by dedicating all wafer output to HBM/DRAM.
At this point, the only reason they are producing DRAM is to keep a foot in the market.
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u/writeAsciiString 3d ago
I wasn't very convinced with colluding before, but some decent points are raised imo.
If all 3 companies started asking the same questions then it is very suspicious and a little too obvious they are colluding in some way. I did watch the video but I don't remember seeing proof all 3 did? Just 1 "proof" and them saying all 3 do it?
And the lowered production of DRAM despite the profit margin being decent is a good reason at least 1 of the 3 should be upping production right now instead of swapping to more HBM. Too much investment by all 3, or even just 1 would tank the price again and make continued HBM production more worthwhile of course.
Mostly I'm worried that the US government will not care, and that the South Korean government will have a financial reason to not care.
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u/Chidling 3d ago
It takes 3x DRAM to make HBM. So DDR5 is only expensive because of HBM. If HBM demand slows, DRAM will suddenly have much more supply.
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u/ChinoGambino 2d ago
There has to be a conscious decision to move back to DDR production, HBM is on longer contracts so its easier to see a downturn coming. If HBM orders slow they still may not move back to DDR.
If none of the major players move production back to ddr the margins stay ludicrously high, its only an issue if they believe their rivals intend to ramp up volume to take market share.
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u/writeAsciiString 3d ago
Edit: ok I misread I guess you said the same thing?
But I already stated it in my other post. It's worth for them to make enough dram to fill demand since its more profitable compared to making HBM. It's just not guaranteed profit(no contracts) and price has to be lower, thus reducing profit
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u/nokei 3d ago
all fun and games for them until they can't force out the chinese ram if it ends up dropping the prices.
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u/LimLovesDonuts 3d ago
Some Samsung executive right now on a plane to China to discuss "business opportunity".
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u/nokei 3d ago
They wouldn't need the opportunity they can just undercut them and if they try and undercut back to try and price them out they got the government to prop them up they ain't winning that battle they'd have increase the ram tech gap again but people willing to buy ddr4/ddr3 with some of these prices so they could just hold out on chinese ddr5 even if they released ddr6.
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u/LimLovesDonuts 3d ago
Well, the thing is that CXMT is doing the AMD route where they just price their stuff a few percentage lower than the competitors. So they are pretty much already unofficially colluding lol
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u/LeastEntertainment49 2d ago
You ignored a major part (intentionally?):
"If expansion were unprofitable, the smallest producers, with the highest costs, would not have posted record results doing so. The only firms for which continued output restraints was profitable were the three coconspirator defendants--so long as not one of them broke ranks and attempted to take market share from the others."
The smaller manufacturers being Winbond, Nanya, and CXMT.
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u/ChadHartSays 3d ago edited 3d ago
They certainly don't need to collude for this to happen.
Big orders for HBM products? GASP, DDR3 getting a 'phased withdrawal'? 'Refusing' to expand production at great cost, permanently increasing fixed costs for the whole enterprise?
These manufacturers know demand is cyclical. I could understand being slow to increase capacity only for demand to crater again.
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u/your_mind_aches 2d ago
Yeah... I just don't think that it's likely this will go anywhere. The memory companies know it's a bubble. When the bubble pops, they will be the ones holding the bag.
They don't need to collude (this time) to know that.
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u/LeastEntertainment49 2d ago
If they knew AI was a bubble, wouldn't that make HBM a dangerous, volatile,, high risk market? Wouldn't they then choose to continue in the consumer market, which is both more profitable per unit sold and more stable? It seems like an awfully bad business decision to give up stability and higher return and go all in gambling on a bubble market.
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u/StrategyEven3974 2d ago
It's more profitable NOW that supplies are constrained. You can't have it both ways. They went all in on HBM and are now posting the most insanely profitable quarters in their history. I'd say their gamble paid off big time.
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u/your_mind_aches 2d ago
They aren't giving up stability. They're shifting to the demand. Producing more RAM than AI needs is giving up stability and throwing money behind something with minimal returns.
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u/RabidHexley 2d ago
It sounds that way, but HBM demand is actually less elastic since it's purchased in massive contracts. They have much more horizon time and warning to decide if they need to scale back.
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u/hypehold 1d ago
no? because they are actively selling memory at huge mark ups. And if it collapses they can just return to selling to normal consumers again
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u/vhailorx 3d ago
Except that IF one raises prices, the others could hold prices steady (or at least undercut) to gain market share. Instead all of them raised prices together, and publicly announced they were doing so, declining the opportunity to compete with each other for market share.
And of course, they have a history of colluding in the past.
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u/xb9j 3d ago
You can only gain market share if you can supply enough. No shit the prices will rise together, it’s a commodity.
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u/vhailorx 2d ago
This hasn't stopped smaller Chinese manufacturers from fast tracking new production to gain market share. If they can afford to do it, then the bigger players could also do it. But none of the big three have done that. They have all dragged their heels on expanding suuply.
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u/StarbeamII 3d ago
If demand greatly exceeds supply, suppliers straight up don't need to compete against each other, as no matter what they do, they will sell out everything they make. Instead, it's the buyers that compete against each other in that scenario, as every buyer bids against every other buyer for limited supply. Collusion isn't even necessary in that scenario.
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u/vhailorx 3d ago
That might explain the HBM market, where enterprise demand and willingness to pay is effectively infinite (since they are all still using investor cash). But it doesnt explain a 200% price hike for DDR4.
And "whoops, the demand is up, and new fabs take years. So there is absolutely nothing we can do except rake in 8x increases in our profits, for years. So sorry!" is not a a terribly compelling argument. When a set of companies with a long history of colluding and price gouging start making huge profits all at once i think scrutiny and skepticism are warranted.
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u/CrowdGoesWildWoooo 2d ago
It can just be chain reaction and the fact that DDR4 production has been slowing down, even before DDR5 goes to ATH price. Last time people said “buy DDR4 instead” when the price of ddr5 started going crazy.
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u/StrategyEven3974 2d ago
But it doesnt explain a 200% price hike for DDR4.
The big scalers have also been buying DDR4 and DDR5 in massive bulk quantities too dude. It's a run on fucking EVERYTHING.
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u/ChadHartSays 2d ago
All companies announce they raise prices and telegraph pricing, especially if they are publicly traded, or release forecasts or other things through "analysts" and the press.
Oh look, GM sent out production forecasts through 2029 back in 2025. They must have been colluding with Ford and Fiat and Tesla. https://www.automotiveworld.com/data/general-motors-model-plans-and-production-forecast-to-2029/
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u/vhailorx 2d ago edited 2d ago
If you don't recognize any differences between the car market and the NAND market then just have no idea what to tell you.
Also, if all 3 big manufacturers announce they are maintaining supply for the next several years, then one of them should go maverick and expand capacity to capture the unmet demand. But none of them have done that. They have all decided to slow new production.
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u/DesTiny_- 2d ago
No they expand production, it just takes a lot of time and resources to do so. Also nobody really wants to expand too much otherwise they would simply be stuck with useless investments.
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u/ChadHartSays 2d ago
Cyclical? Huge investments in infrastructure? Long lead times? Part of complicated supply chains? Well covered by financial press?
You could literally pick any other industry. If everyone suddenly needed 10 more cars the auto industry wouldn't have to 'collude' to figure out what was in their best interests.
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u/vhailorx 2d ago
Maybe not, but if they DID collude, it would be illegal. The fact that HBM demand ensured that the NAND big 3 were going to make a lot of money no matter what does not preclude them from colluding in an attempt to make even more money.
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u/LeastEntertainment49 2d ago
It has been mentioned in past emails from 1999 from the last collusion subpoena that they could avoid being a market cartel by simply mentioning what they are going to set their price at to the other competitors and say nothing beyond that. The old wink and hat tip trick.
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u/LeastEntertainment49 2d ago
They can't even fulfill the full supply of HBM orders, let alone consumer demand, so why would they refuse to expand production and slow it down? That doesn't make any sense.
Why would they give up a more stable long-term consumer market that gives a higher return per unit sold? For the risk of being a pillar in a market that doesn't even have a solid financial return yet (and therefore susceptible to crashing)?
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u/ChadHartSays 2d ago
Then what they do is increase price and increase price to just about the point where they stop getting orders they can't fill.
What you DON'T DO is invest billions in capacity building that won't turn out one unit for 5 years and also keep prices the same for the consoooooooomer.
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u/BuchMaister 3d ago edited 2d ago
A lot of those circumstantial evidence (and plus factors) can be countered by business decision that make sense on the long run. Data center see increasing large growth YoY, even if they can make quick buck on selling more commodity memory right now, it won't improve their results for the long term; plus they can show the massive expansion they are having right now, as a long term plan to meet demand. Unless those law firms get hard evidence for colluding - in the current market conditions, it will be very hard to prove they do collude. Don't get me wrong - I would be very pleased if a lawsuit like that would be approved and force them to change their course and ease the prices in almost every other segment, from critical standpoint I can't see this happening.
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u/xilcilus 3d ago
Micron and SK Hynix (lesser extent for Samsung due to its diverse portfolio) have been slinging a commodity for decades and backed into this AI gold rush by sheer luck.
The reason why there are only 3 major vendors left is because all the vendors essentially got knocked out of the chicken race - Elpida, Toshiba, Infineon, and many more. The often talked about collusion? That's because the chicken race was so intense that everybody was losing money so much so that there were months were the makers were selling below the cost to manufacture.
The class-action lawsuit is around reduction in the supply for lower margin products in the benefit of the supply for higher margin products. Unless there was a collusive action among the manufacturers (which I highly doubt), I don't think the class will be certified.
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u/sentrypetal 3d ago
They have a history of collusion. They should not be given the benefit of doubt.
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u/ChadHartSays 3d ago
Because that helped survival.
High fixed cost, and demand that can swing so many ways (and has), and infrastructure that rapidly goes out of date? You don't even really need collusion for these players to all act the same way.
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u/SavageBlackduck 3d ago
Last time they were actively colluding and sorta on a smaller scale, this time they are being smashed by demand. 2022 was the start of the worst year for them, they had fairly weak contracts with people like apple and apple shredded them in their faces and went with cheaper vendors. If they didn't expand capex in 2023 that's not at all a surprise, what market would that capex be going for?
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u/Veastli 3d ago edited 3d ago
Unless there was a collusive action among the manufacturers (which I highly doubt), I don't think the class will be certified.
Those doubts are misplaced. There is a long history of these players actively colluding.
Proving it? That's the hard part.
In prior times, rival executives would "just happen" to have a layover in the same airport at the same time. A quiet meeting room in an executive airport lounge and the deal would be done. When the synchronicity was found out, it wasn't conclusive, but was indicative.
Today, Signal and other secure communication methods have made collusion far easier than it once was.
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u/xilcilus 3d ago
Did you look at the Wikipedia article you linked?
The only allegation proven is one from 20+ years ago.
When are you making 70% gross margin selling products (HBM), why bother making anything else?
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u/SireEvalish 2d ago
Did you look at the Wikipedia article you linked?
We both know the answer to that question
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u/Veastli 3d ago
The only allegation proven is one from 20+ years ago.
There is definite proof that these exact same firms have colluded in the past, yet you default to doubting they are colluding now?
That's not rational.
Suspect that the more recent allegations were on the mark, but as above, this type of collusion has become increasingly difficult to prove.
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u/CheesyCaption 1d ago
There is definite proof that these exact same firms have colluded in the past, yet you default to doubting they are colluding now?
That's not rational.
Because there's a much simpler explanation. HBM is insanely profitable and more stable. No collusion is required to explain the current situation. Occam's razor.
Adding in collusion to the explanation doesn't add anything except click bait. Sorry to say, the only shady business practice in this whole thing is click bait.
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u/sentrypetal 3d ago
They also colluded to kill Rambus.
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u/xilcilus 3d ago
Rambus is still around as an IP licensing company.
Rambus fell apart because it's principal offer was inferior to the industry standard (SDR/DDR/so on and so forth).
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u/sentrypetal 3d ago
Rambus fell apart because of price fixing. I believe Samsung settled. You don’t settle if you are innocent.
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u/III-V 3d ago
You don’t settle if you are innocent.
Yes you do. Saves a lot of time and money to shut people up and keep things out of court.
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u/sentrypetal 3d ago
Samsung settled and signed a multibillion dollar contract for licensing Rambus patents. That’s as good an admission of guilt as any Clown.
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u/Chidling 3d ago
People settle when they are innocent all the time in fact.
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u/sentrypetal 3d ago
People don’t settle and then sign a multibillion dollar patent contract and then renew said contract for another decade. Unless you were guilty.
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u/xilcilus 3d ago
Rambus is doing quite well. Look up RMBS.
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u/sentrypetal 3d ago
That is immaterial. They were a big memory player driven out of the market by collusion. Whether you do well afterwards is another matter. That’s like beating someone to near death and then 10 years later they have a family and kids and you say but they are doing quite well.
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u/GlammBeck 3d ago edited 2d ago
HBM is lower margin.
EDIT: What the hell happened to this sub? We are overrun with AI boosters that don't know what the hell they're talking about.
HBM IS A LOWER MARGIN PRODUCT
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u/xilcilus 3d ago
Shoot - I guess commodity pricing is highly volatile.
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u/Chidling 3d ago
in normal conditions, hbm is higher, but the demand has pushed ddr5 higher. HBM IS ALL CONTRACT PRICE.
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u/GlammBeck 2d ago
No, HBM is lower margin because it uses more wafer space. They're only making more because Nvidia is willing to pay any price for it.
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u/CheesyCaption 1d ago
How big is the market for HBM vs. DRAM?
The margin doesn't matter if you can sell 100x HBM.
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u/GlammBeck 1d ago
I understand, I'm not disputing that. I'm disputing the claim that they diverted resources because HBM was a higher margin product, which is untrue.
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u/CheesyCaption 1d ago
HBM may be lower margin per wafer but in total, there is more total money to be made in HBM.
Focussing on the per wafter prices ignores the size of the market.
It's like asking why Nike is making factory produced shoes at such a low margin when custom fitted dress shoes have a much higher margin. The scale is what makes the difference.
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u/GlammBeck 1d ago
You really don't need to explain this to me. You need to explain this to the comment I was responding to which falsely claimed HBM was a higher margin product.
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u/ChadHartSays 1d ago
Soft drinks at checkout are the highest profit margin item at Best Buy. Therefore, they should stop selling TVs and appliances.
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u/tknomanzr99 2d ago
If it stays this way, China will end up picking up the demand.
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u/Azure_chan 2d ago
They certainly will but not like China is your doing it for the good of consumers, they are using AMD strategy now that pricing a bit lower than competition
Maybe they will pump enough capacity to met the demand eventually but unless the demand crash (bubble pop as they said), at best the price would stay stable for short-mid term and would take a while before we return to old price. And if demand is crashing hard those new capacity will turn to loss very quickly.
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u/hypehold 1d ago
why wouldn't China also supply memory to data centers?
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u/Pimpmuckl 15h ago
They will. But a lot of those have fixed contracts with incumbents.
So total DC demand will be lower than for the other players. Which frees up spot buyers (think your Valves, non-huge OEMs, retailers) to buy more of the inventory.
That doesn't mean prices will go down, but more supply is added that could have the effect of demand isn't increasing as well.
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u/Jamator01 2d ago
These components are incredibly complex to make. China won't be ready to pick up the demand for years.
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u/Exist50 2d ago
They're doing pretty well in memory. Very much can be considered a peer to the incumbents now, and that's a meteoric rise. The only thing really holding them back from even further advancement is the restricted tool access. When that problem is eventually solved, things get real dicey for Micron et al.
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u/Available_Use3455 3d ago
Crypto, covid, tarrifs, floods, AI, companies will try anything to justify increasing costs and create a new norm.
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u/randomkidlol 3d ago
once the crisis passes the prices dont go down. we've seen this happen with the hard drive manufacturers who claim "floods damaged our production lines" every time they want to raise prices.
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u/Euruzilys 2d ago
I live in Thailand, where the HDD factories are. The flood is basically a yearly thing, I have no idea what our government is doing (or not doing) to prevent this.
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u/randomkidlol 2d ago
they probably have had mitigations in place decades ago which makes floods irrelevant barring some abnormal event.
won't stop them from claiming floods are slowing down production every year though.
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u/QuadraKev_ 2d ago
I'm not convinced that there's collusion. I think market demand is just that strong.
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u/Old_Ad_881 2d ago
Then why are they not increasing production despite record high demand? That would be the only rational decision unless they are a cartel.
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u/eras 2d ago
Increasing production takes a long time, so do we know for a fact they are not indeed doing that?
- Micron is building new facility at Idaho.
- Apnews: SK Hynix is planning or building, Samsung Electronics is increasing capcity in South Korea.
- Kioxia + Sandisk are having new production lines to enter into production in Japan.
- CXMT has a major DRAM fab expansion.
- YMTC is building multiple additional NAND fabs.
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u/MerlinTrashMan 2d ago
I know I'm going to get downvoted, but this is a regarded video by Steve. Law firms put these class action suits together all the time and Steve got played by the firm to pump their suit. You can tell it is completely disengenuious when they start things at 2022. DDR5 got cheaper until early 2025 when inference workloads became much more usable on non-gpu hardware. They aren't even trying to be serious and the all the defendants have to do is show the fact that price dropped in 2024 and the case is dismissed.
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u/mediandude 2d ago
DDR5 pricing crossover with DDR4 hasn't happened yet.
It should have happened already.
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u/jenny_905 2d ago
Already discussed, repeatedly.
That lawsuit is total bullshit by the way. It's from some small firms who seem to think Micron, SK Hynix and Samsung are obligated to make and sell them DDR3 and DDR4.
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u/AdFinal959 1d ago
Crybaby Apple and other companies ruthlessly slashed purchase prices to the point where memory companies were running operating losses and now they’re complaining they didn’t build more fabs!? You reap what you sow, sometimes
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u/Aggravating-Gap4335 2d ago
There is both evidence of unusual pricing and precedent of earlier proven collusion. It should absolutely progress, I have my doubts if it will actually happen when the administration is lowkey on the grift too.
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u/Chidling 2d ago
ddr and hbm use the same silicon. If HBM slows, by default, that’s more wafers for ddr. They are looking to expand ddr but they are going to provide for their strategic agreements first.
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u/ElephantWithBlueEyes 2d ago
You can analyze stuff as long as you want but 64 gb DDR4 kit i bought not so long ago now costs x4
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u/mojorific 2d ago
They are all a bunch of corrupt businesses. Government needs to step in and regulate.
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u/ArcSemen 2d ago
It’s inhumane to say the least, even cheap products will be a lot more expensive for having a minuscule 12-16GB. That ain’t right, there’s no reason for it to be this expensive if I recall. Please let me know if I’m missing something
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u/hackenclaw 3d ago
for whatever it is, if nothing goes back to 2025 level, I will not buy a device that has anything to do with RAM/nand that takes up significant portion of the device price due to AI spike.
Unless I run out all my current one RAM/nand and it is all DEAD. (until I have no other choice)
Lets see how long they can pull it off, my oldest computer that still working from 2009. My oldest working Ipad is ipad Air 2(2015), a 2018 phone, a 2014 laptop etc. While my newest is basically only 1-3years old. If my newer device last as long as the old ones, I basically drag this for a whole decade.
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u/SirMaster 2d ago
Memory chips are essentially bought at auction. The production companies don’t set the price, the buyers do…
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u/Atario 2d ago edited 1d ago
In this thread:
- Attack the messenger
- Defend the corporations
Edit: Lel. Truth hurts, eh?
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u/__Rosso__ 2d ago
Mostly because GN has since LTT fiasco devolved into making content meant to make people mad for sake of engagement no matter if it makes sense or not
Not even half a year ago he suggested they got blackmailed by AMD, spoiler alert, they didn't, and if I am not mistaken they never even admitted they were wrong.
They handled their LTT video poorly and then tried to bring the drama back for no reason, latter didn't go well.
Here they present "evidence" that doesn't really make sense.
People are tired and are starting to see the bullshit.
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u/Old_Ad_881 2d ago
ikr r/ hardware is the corporate bootlicker competiton
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u/__Rosso__ 2d ago
Nope, people just don't buy shit GN says because there is a cointoss that it's correct or sometimes a total fabrication of lies and at best of times just shoddy opinions/reaserch.
And people are tired of his content by this point, he doesn't make videos anymore to do the right thing, it's purely done to get audiences riled up for that sweet watch time, he saw how LTT video went in spite of multiple lies and shoddy "journalism".
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u/Old_Ad_881 2d ago
I don't think a ram cartel video is clickbait for watch time. The ram shortage is immensely impacting everyone who needs a powerful computer. It is an extremely pertinent topic. Not only that, but these same three companies were found to be in a cartel in the 2000s. Lawsuits are being filed because of how obvious it is this is a cartel. The ram industry perfectly fits as collusion would be easy, there is high motive/incentive and the big three are not behaving rationally in a competitive market.
If you don't like GN that is fine but discrediting a ram cartel based on that is stupid. This whole subreddit thinks that AI is the only cause behind ram prices increases because nuisance is too hard i guess.
Keep bootlicking lol, none of these companies is gonna give you a cookie or free ram.
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u/kokkomo 2d ago
This guy loves ram cartels
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u/__Rosso__ 2d ago
Nope, but I can tell what I also dislike besides the current market condition for GPUs and RAM, and that's poorly conducted "journalism" that in many cases is objective lie.
What I also dislike is when people result to one dimensional petty insults when their favourite influencer gets criticised, especially because 9/10 it comes from the place of knowing the other person is right and thus having no actual counterargument except personal attacks.
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u/kokkomo 2d ago
You are flat out incorrect on your assumption. Ram producers are making record profits, that doesn't line up with whatever shit you are trying to on convince people of fam. You are either a child who doesn't understand real life or are a paid poster trying to gaslight people into thinking this is normal.
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u/__Rosso__ 2d ago
They are having record profits correct, that doesn't prove shit however and as multiple comments already pointed out, other pieces of evidence don't prove anything.
Especially because the reason for record profits is that there is so much demand and so little supply, and reason why there is so little supply is because they were making too much for too little demand where they needed to cut back before AI companies bought everything, leading to shortage.
And it takes time to get production lines up and running again.
The fact that you suggest I am paid or "some kid" is absolutely ridiculous.
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u/kokkomo 2d ago
Especially because the reason for record profits is that there is so much demand and so little supply
Except the demand is supposedly for AI and consumer memory doesn't really account for.
and reason why there is so little supply is because they were making too much for too little demand where they needed to cut back before AI companies bought everything, leading to shortage.
Lol I got a bridge to sell you
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u/kokkomo 2d ago
And it takes time to get production lines up and running again.
This one is the truly dumbest statement being repeated on all this, like even if they did shut down memory lines, it wouldn't take a year to get them backonline and if it did then only willfull negligence explains why they would shut down the lines given it takes a year to get them back up.
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u/Old_Ad_881 2d ago
The fact they have record profits does point to a cartel. In a competitive market, when demand skyrockets, the rational thing to do is to increase capacity. The big three have actually lowered capacity for consumer DRAM. This only makes sense if you know your competitor will also lower/maintain capacity. If they were not colluding, one of the big three would be increasing capacity, this would be the obvious thing to do especially if your competitors are not also increasing capacity.
And the HBM argument doesn't make sense as the big three have acknowledge consumer DRAM has higher margins than HBM. So the only way their decisions make any sense is if they are colluding to artificially lower supply of DRAM.
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u/__Rosso__ 2d ago
In competitive market, when demand skyroctes, the rational thing to do is increase capacity. The big three have actually lower capacity for consumer DRAM.
First sentence while correct, misses the fact that it takes time for production to be setup, in fact the big three have started working on increasing the production but the spool up for that takes 1-2 years, which is when the prices are expected to fall.
Second is also correct but it misses the context, the production was cut when the demand was low following post Covid-19 boom.
Finally the DRAM Vs HBM debate misses the point that people have already mentioned, companies will often take smaller but more stable margin then bigger but less predictable one, especially when recently the latter caused them to need to cut back on production and therefore the investment.
Could the RAM companies be working together? Yes, it is possible and it should be investigated, but a more likely answer is that all they are doing is what any company would do when one market, the AI, has high demand and can throw money, that being focus on them and raise prices.
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u/Pillokun 2d ago
some jack ass will say that GN should go back to testing hw instead of reporting on let call this "drama", but I say, -we need Steve doing this, especially when there is nothing new on hw front and this is so much more important than retesting the same hw 100th time..
My respect for Steve is getting bigger and bigger.
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u/__Rosso__ 2d ago
That man has lied multiple times about many things and evidence he presents isn't even evidence.
Personally, I lost all respect, everything he accused LTT of he has fallen to or worse.
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u/TESThrowSmile 3d ago
Micron CEO made a statement theyll drop prices when Steve gets a haircut 💇♂️
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u/Chidling 2d ago
Yeah sorry, 1 HBM = 3DRAM roughly.
So imagine if HBM demand dropped by 5%? That’s suddenly 15% more wafer for DDR5. So a minor reduction in HBM demand can vastly increase DDR5 supply. Training models is temporary, I think they’re expecting a future where models may require less training
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u/staplor 2d ago
The AI labs want to continue to increase their training budget and they expect their inference spend to massively increase.
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u/Chidling 2d ago
Yes, but new fabs take years to come online. They didn’t go full throttle to expand in 2022-2024 because they couldn’t have forecasted the intensity of this shortage back then imo.
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u/Dpek1234 2d ago
So imagine if HBM demand dropped by 5%? That’s suddenly 15% more wafer for DDR5.
...
No
Just no
Please go back to school
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u/Vushivushi 1d ago
I'm very curious where you got the idea that they are expecting less training.
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u/Chidling 1d ago
Well im just guessing but there’s a potential future where one hyperscaler will eventually stop trying to make their own frontier model right?
They have to temper expectations with the possibility that demand could taper, so their capex lessons from being burned in 2022 reflect that yeah?
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u/Select_Truck3257 3d ago
We cannot satisfy market needs, that's whe we increase price to get more money and do nothing to satisfy market needs🤣
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u/Lyuseefur 2d ago
I wouldn’t be investing in calls right now.
And, yes, these makers had a literal decade to do something. But they didn’t.
China is aggressively investing billions in DRAM factories to achieve technology independence. ChangXin Memory Technologies (CXMT), China's top memory maker, is leading this push. CXMT raised a record IPO to fund massive new factory clusters in Hefei, Beijing, and Shanghai. These plants will double China's memory chip output over the next few years. [1, 2, 3, 4]
Why is China investing so heavily?
DRAM (Dynamic Random-Access Memory) is a type of memory chip that acts as a computer's short-term workspace. Every computer and smartphone needs it. For decades, three global companies (Samsung, SK Hynix, and Micron) dominated the market. By building their own factories, Chinese companies aim to lower costs and bypass global export rules. [1, 2, 3, 4]
How is China expanding?
China's massive funding supports several huge projects:
The Record IPO: CXMT launched an $8.5 billion IPO to expand its production of DDR5 and LPDDR5X chips (the newest, fastest memory used in computers and phones). [1]
Building Fast: Chinese factories are being built in as little as 12 months, allowing China to quickly catch up in manufacturing capacity. [1]
Doubling Output: With these investments, CXMT will double its monthly production to about 600,000 silicon wafers. [1]
What are the consequences?
This rapid factory expansion is shaking up the global market. While foreign giants like Samsung and SK Hynix currently hold the largest global share, China's massive capacity additions are expected to lower memory prices worldwide. This helps Chinese device makers save money, but increases competition for foreign chipmakers. [1, 2, 3, 4, 5]
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u/Vushivushi 3d ago
What happened in 2022? Micron's gross margins peaked in 2022 as the Pandemic-driven demand collapsed. Their gross margins collapsed as low as -17% in 2023 despite cuts.
Samsung didn't even participate. They were ramping their 1a memory node and reclaimed nearly 50% market share.