Comment by timschmidt
5 days ago
Potentially unpopular take: memory manufacturers have been operating on the margins of profitability for quite a while now. Their products are essentially an indistinguishable commodity. Memory from Samsung or Micron or another manufacturer may have slight differences in overclockability, but that matters little to folks who just want a stable system. Hopefully the shortage leads large purchasers to engage in long-term contracts with the memory manufacturers which give them the confidence to invest in new fabs and increased capacity. That would be great for everyone. Additionally, we're likely to see Chinese fab'd DRAM now, which they've been attempting since the '70s but never been competitive at. With these margins, any new manufacturer could gain a foothold.
If LLMs' utility continues to scale with size (which seems likely as we begin training embodied AI on a massive influx of robotic sensor data) then it will continue to gobble up memory for the near future. We may need both increased production capacity _and_ a period of more efficient software development techniques as was the case when a new 512kb upgrade cost $1,000.
> Hopefully the shortage leads large purchasers to engage in long-term contracts with the memory manufacturers which give them the confidence to invest in new fabs and increased capacity.
Most DRAM is already purchased through contracts with manufacturers.
Manufacturers don't actually want too many extremely long term contracts because it would limit their ability to respond to market price changes.
Like most commodities, the price you see on places like Newegg follows the "spot price", meaning the price to purchase DRAM for shipment immediately. The big players don't buy their RAM through these channels, they arrange contracts with manufacturers.
The contracts with manufacturers will see higher prices in the future, but they're playing the long game and will try to delay or smooth out purchasing to minimize exposure to this spike.
> Additionally, we're likely to see Chinese fab'd DRAM now, which they've been attempting since the '70s but never been competitive at.
Companies like Samsung and SK Hynix have DRAM fabs in China already. This has been true for decades. You may have Chinese fab'd DRAM in the computer you're using right now.
Are you referring to complete home-grown DRAM designs? That, too, was already in the works.
I don't agree with this sentence. Why would not the same apply advice to oil and gas contracts? If you look at the size and duration of oil and gas contracts for major energy importers, they often run 10 years or more. Some of the contracts in Japan and Korea are so large, that a heavy industrial / chemical customers will take an equity stake in the extraction site.
Except silicon, power, and water (and a tiny amount of plastic/paper for packaging), what else does a fab need that only produces DRAM? If true, then power is far and away the most variable input cost.
> Why would not the same apply advice to oil and gas contracts?
Because oil & gas suppliers only ever sell one product, and memory fabs can dynamically switch product mix in response to supply & demand to optimize profits. The same sand, power and water can make DDR4, HBM or DDR5
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Are you seriously trying to compare raw commodity inputs traded on the futures market to finished semiconductor products that are expected to become deprecated, uncompetitive and/or EOL'd in a few years?
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Same does apply to gas contracts. So many a time LNG companies break contracts and pay hefty penalties if the spot rate is high enough.
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> Except silicon, power, and water
Various chemicals too, https://haz-map.com/Processes/97
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> Except silicon, power, and water (and a tiny amount of plastic/paper for packaging), what else does a fab need that only produces DRAM? If true, then power is far and away the most variable input cost.
Borrowing costs can be wildly variable and are the main cost of making silicon. All the "inputs" over the lifecycle of a fab are so completely dwarfed by the initial capital costs that you can pretty much ignore them in any economic analysis. The cost of making chips is the cost of borrowing money to pay for capital costs, and the depreciation of the value of that capital.
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> Are you referring to complete home-grown DRAM designs? That, too, was already in the works.
Yes, via cxmt as discussed by Asianometry here: https://www.youtube.com/watch?v=mt-eDtFqKvk
As I mentioned, various groups within China have been working on China-native DRAM since the '70s. What's new are the margins and market demand to allow them to be profitable with DRAM which is still several years behind the competition.
Lots of low end android boxes use cxmt ddr4.
I've just remembered a similar situation in 1993!
A Japanese factory that made epoxy resin for chips was destroyed and the price of SIMM chips skyrocketed (due to lack of availability).
I remember being very upset that I wasn't going to be able to upgrade to 4MB.
There should be a t-shirt for that ;-) I remember paying insane prices that year.
Well, what really prompted this crisis is AI, as well as Samsung shutting down some production (and I have to say I don't think they mind that the pricing has skyrocketed as a result!)
But yes we're going to need more fabs for sure
> Well, what really prompted this crisis is AI,
If the shortage of RAM is because of AI (so servers/data centers I presume?), wouldn't that mean the shortage should be localized to RDIMM rather than the much more common UDIMM that most gaming PCs use? But it seems to me like the pricing is going up more for UDIMM than RDIMM.
UDIMM and RDIMM use the same DRAM chips. And my understanding is that the fabs can switch between DDR5, LPDDR5, and maybe HBM as needed. This means high demand for one type can create a shortage of the others.
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It's a valid question if you're not familiar with the RAM market. Sorry you're getting downvoted for it.
The manufacturers make the individual chips, not the modules (DIMMs). (EDIT: Some companies that make chips may also have business units that sell DIMMS, to be pedantic.)
The R in RDIMM means register, aka buffer. It's a separate chip that buffers the signals between the memory chips and the controller.
Even ECC modules use regular memory chips, but with extra chips added for the ECC capacity.
It can be confusing. The key thing to remember is that the price is driven by the price of the chips. The companies that make DIMMs are buying chips in bulk and integrating them on to PCBs.
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Because manufacturers transitioned fab and assembly lines from low margin dram to higher margin products like hbm, hence reducing dram supply. But the demand for consumer grade dram hasn’t changed much so prices for it go up.
The chips come from same factory. And difference betweeen those two is... a buffer chip. And extra ram die for ECC
Same chips in both, made in the same fabs. Any relative price difference is like the difference between regular and premium gas/petrol.
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It's a sad trend for "the rest of us" and history in general. The economic boom of the 80's thru the 2010s has been a vast democratization of computation - hardware became more powerful and affordable, and algorithms (at least broadly if not individually) became more efficient. We all had supercomputers in our pockets. This AI movement seems to move things in the opposite direction, in that us plebeians have less and less access to RAM, computing power and food and...uh...GPUs to play Cyberpunk; and are dependent on Altermanic aristocracy to dribble compute onto us at their leisure and for a hefty tithe.
I am hoping some of that Clayton Christensen disruption the tech theocracy keep preaching about comes along with some O(N) decrease in transformer/cDNN complexity that disrupts the massive server farms required for this AI boom/bubble thing.
> This AI movement seems to move things in the opposite direction, in that us plebeians have less and less access to RAM, computing power and food and...uh...GPUs to play Cyberpunk; and are dependent on Altermanic aristocracy to dribble compute onto us at their leisure and for a hefty tithe.
Compute is cheaper than ever. The ceiling is just higher for what you can buy.
Yes, we have $2000 GPUs now. You don't have to buy it. You probably shouldn't buy it. Most people would be more than fine with the $200-400 models, honestly. Yet the fact that you could buy a $2000 GPU makes some people irrationally angry.
This is like the guy I know who complains that pickup trucks are unfairly priced because a Ford F-150 has an MSRP of $80,000. It doesn't matter how many times you point out that the $80K price tag only applies to the luxury flagship model, he anchors his idea of how much a pickup truck costs to the highest number he can see.
Computing is cheaper than ever. The power level is increasing rapidly, too. The massive AI investments and datacenter advancements are pulling hardware development forward at an incredible rate and we're winning across the board as consumers. You don't have to buy that top of the line GPU nor do you have to max out the RAM on your computer.
Some times I think people with this mentality would be happier if the top of the line GPU models were never released. If nVidia stopped at their mid-range cards and didn't offer anything more, the complaints would go away even though we're not actually better off with fewer options.
> Yes, we have $2000 GPUs now. You don't have to buy it. You probably shouldn't buy it. Most people would be more than fine with the $200-400 models, honestly. Yet the fact that you could buy a $2000 GPU makes some people irrationally angry.
This is missing the forest for the trees quite badly. The 2000 price GPUs are what would've been previously 600-700, and the 200-400 dollar GPUs are now 600-700. Consumers got a shit end of the deal when crypto caused GPUs to spike and now consumers are getting another shitty deal with RAM prices. And even if you want mid range stuff it's harder and harder to buy because of how fucked the market is.
It would be like if in your example companies literally only sold F-150s and stopped selling budget models at all. There isn't even budget stock to buy.
> Some times I think people with this mentality would be happier if the top of the line GPU models were never released. If nVidia stopped at their mid-range cards and didn't offer anything more, the complaints would go away even though we're not actually better off with fewer options.
If the result was that games were made and optimised for mid-range cards, maybe regular folks actually would be better off.
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The thing about being annoyed about the top of the range prices, for me, it irritates as it feels like it drags the lower models prices upwardsz
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The problem is the VRAM segmentation.
A GTX 1080 came out in the first half of 2016. It had 8 GB of VRAM and cost $599 with a TDP of 180W.
A GTX 1080 Ti came out in 2017 and had 11 GB of VRAM at $799.
In 2025 you can get the RTX 5070 with 12 GB of VRAM. They say the price is $549, but good luck finding them at that price.
And the thing with VRAM is that if you run out of it then performance drops off a cliff. Nothing can make up for it without getting a higher VRAM model.
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I would take this argument more seriously if
-the whole reason why the GPU is $2000 is because of said AI bubble sucking up wafers at TSMC or elsewhere, with a soupçon of Jensen's perceived monopoly status...
-for a good part of the year, you could not actually buy said $2000 GPU (I assume you are referring to the 5090) also because of said AI bubble
(granted, while Jensen does not want to sell me his GPU, I would like to point out that Tim Cook has no problem taking my money).
on that point, I can go and buy a Ford F150 tomorrow. Apparently, per the article, I would have problems buying bog standard DDR5 DIMMS to build my computer.
One can see it that way, granted. When I zoom all the way out, all of consumer computation has existed as sort of an addendum or ancillary organ to the big customers: government, large corporations, etc. All our beloved consumer tech started out as absurdly high priced niche stuff for them. We've been sold the overflow capacity and binned parts. And that seems to be a more-or-less natural consequence of large purchasers signing large checks and entering predictable contracts. Individual consumers are very price sensitive and fickle by comparison. From that perspective, anything that increases overall capacity should also increase the supply of binned parts and overflow. Which will eventually benefit consumers. Though the intervening market adjustment period may be painful (as we are seeing). Consumers have also benefited greatly from the shrinking of component sizes, as this has had the effect of increasing production capacity with fixed wafer volume.
> When I zoom all the way out, all of consumer computation has existed as sort of an addendum or ancillary organ to the big customers: government, large corporations, etc.
Perfectly stated. I think comments like the one above come from a mentality that the individual consumer should be the center of the computing universe and big purchasers should be forced to live with the leftovers.
What's really happening is the big companies are doing R&D at incredible rates and we're getting huge benefits by drafting along as consumers. We wouldn't have incredible GPUs in our gaming systems and even cell phones if the primary market for these things was retail entertainment purchases that people make every 5 years.
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Gaming drove the development of GPUs which led to the current AI boom. Smartphones drove small process nodes for power efficiency.
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100%. We’ve seen crazy swings in RAM prices before.
A colleague who worked with me about 10 years ago on a VDI project ran some numbers and showed that if a Time Machine were available, we could have brought like 4 loaded MacBook Pros back and replaced a $1M HP 3PAR ssd array :)
>We all had supercomputers in our pockets.
You still do. There is no "AI movement" you need to participate in. You can grab a copy of SICP and a banged up ten year old thinkpad and compute away, your brain will thank you. It's like when people complain that culture is unaffordable because the newest Marvel movie tickets cost 50 bucks, go to the library or standardebooks.org, the entire Western canon is free
Living on the edge is expensive, and always has been.
Living on the edge from 4 years ago is basically free.
Well put. Since the 1980's consumer has been driving the segment. Even supercomputers were built out of higher end consumer hardware (or playstations in one example).
The move to cloud computing and now AI mean that we're back in the mainframe days.
True, it is reminiscent of a time before me when people were lucky to have mainframe access through university. To be fair this was a long time in the making with the also quite aggressive move to cloud computing. While I don't mind having access to free AI tools, they seem to start taking possession of the content as well
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It's not like you need 64GB to have "democratized computation". We used to have 64MB and that was plenty. Unfortunately, software got slower more quickly than hardware got quicker.
> Unfortunately, software got slower more quickly than hardware got quicker.
Hard disagree. A $600 Mac Mini with 16GB of RAM runs everything insanely faster than even my $5000 company-purchased developer laptops from 10 years ago. And yes, even when I run Slack, Visual Studio Code, Spotify, and a gazillion Chrome tabs.
The HN rhetoric about modern computing being slow is getting strangely disconnected from the real world. Cheap computers are super fast like they've never been before, even with modern software.
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It is pretty important if you are doing things like 3d animation, video editing, or advanced CAD software. Plus software in general has ballooned its memory requirements and expectations. Even my 11 year old PC had to have a RAM upgrade a few years ago just because software updates suck up so much extra memory, and there is almost nothing consumers can do about it.
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> We used to have 64MB and that was plenty.
Bullshit. It was cramped and I wasn't able to do half of what I was wanting to actually do. Maybe it was plenty for your usecases, but such a small amount of memory was weak for my needs in the late 90s and 2000s. 64MB desktops struggled to handle the photo manipulations I wanted to do with scanned images. Trying to do something like edit video on a home PC was near impossible with that limited amount of memory. I was so happy when we managed to get a 512MB machine a few years later, it made a lot of my home multimedia work a lot better.
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"memory manufacturers have been operating on the margins of profitability for quite a while now."
The manufacturers are scumbags is more likely answer.
https://en.wikipedia.org/wiki/DRAM_price_fixing_scandal
I don't disagree per-se, but this is the sort of thing which happens when only a few businesses exist in a commodity market with high entry costs. IOW, it's not great, but it is predictable. See: Oil.
Looking forward to the "Organization of Processor-Etching Corporations".
It's usually not only illegal, but also a crime.
Anyway, that's the kind of market that governments always need to act upon and either supply directly or regulate intensively.
It's not just predictable, it's illegal. Of course, if you have an executive that actually cares about enforcing the law.
There is a zero lower bound on the interest rate. Excess capital means negative returns on capital. The money system can't express the state of the real world so either companies close down until the yield is positive, or the companies pass on the artificial minimum price onto the consumer. In both cases, the real world is forced to match the state of the money system.
Being shocked that companies try their best to deal with the bad cards they have been dealt with should be expected. The money system simply cannot express the concept of surplus capital or abundance. Positive interest means capital is scarce, so capital must be made scarce even if there is abundance.
Before you come up with the argument that the interest rate is supposed to reflect a market property and therefore does not force itself upon the market, remember that I said that there is an artificial restriction in the money system that prevents the state of the real market to be expressed. The non-profit economy has never had a chance to exist, because our tools are too crude.
The non-profit economy includes resilient production with slight/minor overproduction.
Think about how stupid the idea of a guaranteed 0% yield bond is (aka cash). The government obligates itself to accept an infinite amount of debt if the real return on capital would ever fall negative. No wonder it has an incentive to inflate the value of the bond away.
I wonder how long it will take for China to flood the market with state-of-the-art modules. It's a pretty decent opportunity for them. They probably can hasten the build of new fabs more than many other nations.
But my guess is that this shortage is short-lived (mostly because of the threat above). There's no OPEC for tech.
They just debuted in house DDR5 2 days ago: https://wccftech.com/cxmt-debuts-domestically-produced-ddr5-...
You mean “capitalists”.
Maximizing profit is the only sane way to play a rigged game
DRAM already has a spot price, because it is a commodity.
https://www.trendforce.com/price/dram/dram_spot
Manufacturing is based on anticipating demand.
Unforseen things like the pandemic hurt profits.
Letting things go this unmanaged with a 3 year run way for AI demand seems a little hard to understand. In this case, not anticipating demand seems to creates more profit.
I find it hard to believe the pandemic hurt the profits of computing hardware, demand went up from it not down.
I'm not sure if profits were hurt, but the manufacturing did slow and stop and take some time to get going again.
https://videocardz.com/newz/chinese-cxmt-to-produce-ddr5-800...
For some reason it never crossed my mind that there would be futures for DRAM the same way there is for gold and silver.
So this would have been great may be 15 years ago, or am I mistaken? New fabs for DRAM would take a while, no?
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I guess we'll just have to stop making computer memory if it ceases to be profitable. The market is so efficient.