Memory Prices Indefinitely High: SK Hynix Says Shortage Continues Through 2030 We haven't been complaining about RAM prices quite as much on the podcast
The price is only high because of the artificial demand from all the data centers. Manufacturers are increasing production capacity to provide more supply. Once the bubble bursts, that demand will drop, but the production capacity will still be there. Supply and demand. Price will go down.
thats what the economics textbook says, but it also says that all parties in the economy are perfectly rational. however this is not the reality. they have tested it, people are already used to the high prices and they have no problem with it, enough of them will buy it anyway. the price drops from completely unaffordable 7x price to barely affordable 4x price, and people are already buying it again. if they aim for 4x price, they only need the quarter of the former sales to make the same profit. and if at 4x price the sales are the quarter of former sales, they could theoretically shut down most factories or production lines to reduce costs and in turn raise profits even more.
First new fabs are being opened this or next year last I heard. AI boom started in 2022 and fab construction and setup time is said to be 4 years (or more if there are issues).
Of course the question is, will they be making more DDR or more HBM…
why would it be cheap, if people would buy it at 4x the normal price?
The price is only high because of the artificial demand from all the data centers. Manufacturers are increasing production capacity to provide more supply. Once the bubble bursts, that demand will drop, but the production capacity will still be there. Supply and demand. Price will go down.
thats what the economics textbook says, but it also says that all parties in the economy are perfectly rational. however this is not the reality. they have tested it, people are already used to the high prices and they have no problem with it, enough of them will buy it anyway. the price drops from completely unaffordable 7x price to barely affordable 4x price, and people are already buying it again. if they aim for 4x price, they only need the quarter of the former sales to make the same profit. and if at 4x price the sales are the quarter of former sales, they could theoretically shut down most factories or production lines to reduce costs and in turn raise profits even more.
I thought of the problem is they aren’t ramping up production because they think AI is a bubble
First new fabs are being opened this or next year last I heard. AI boom started in 2022 and fab construction and setup time is said to be 4 years (or more if there are issues).
Of course the question is, will they be making more DDR or more HBM…
No, they are definitely ramping up production, just not nearly fast enough. Chip factories take longer to build than data centers.