Comment by ajb
2 days ago
I think it was Sophie Wilson who described the DRAM market as "a game of chicken with billions of dollars". Basically the market flip flops between glut and scarcity. When there are too many fabs, there is a glut and all the manufacturers grit their teeth and lose money, until one chickens out and closes a fab. Then prices go up and the ones still in the game make money, hand over fist, until too many fabs are built for the next generation of chips and the market flips back.
I haven't personally checked this against market data, FWIW.
That is correct. Even when we are only left with three DRAM foundry, all three were watching out whether one of them will build a new Fab. That has created an environment where no one wants to build it first unless they are absolutely sure, and when one will be built all other follows.
And that is the reason why TSMC said they will never go into the DRAM business.