SK Hynix Forecasts Tight Memory Supply Lasting Through 2028
Posted by imaginary_num6er@reddit | hardware | View on Reddit | 110 comments
Posted by imaginary_num6er@reddit | hardware | View on Reddit | 110 comments
pinezatos@reddit
translation: we gonna keep doing artificial scarcity to siphon as much money as we can or until the bubble pops, whichever comes first
sung7044@reddit
Memory manufacturers had massive loss recently. If they increase the investment matching today's supply, there will be another massive loss in the near future.
It is risk management. Not greedy decision. You can see it yourself in their balance sheet in this 10 years.
Nobody expected this much hype in Memory business. When Nvidia shoot to the moon, they even consider 'end of Memory semiconductors'.
Samsung was trying to expand their logic semicon business aggressively, which led gross loss in their balance sheet today.
If they knew, they would try to invest in Memory much more sooner to dominate Memory business even further.
Intel sold their NAND Dept to SK hynix called Solidigm which was bleeding cash and now is making full loads of cash.
A-BOMB_NOT-REAL@reddit
Has there actually been any evidence of them limiting their production capacity? Because all I've seen is that AI seemingly has unlimited money and demand that outstrips supply.
AwesomeWhiteDude@reddit
No, the manufactures are just refusing to rush expansion projects.
Price fixing is more likely to happen once the AI bubble pops, atm tho its all demand far outstripping supply.
Opposite_Elephant573@reddit
Rushing them how?
You know, you can sleep with 9 women but that wouldn't get you a baby in one month.
AwesomeWhiteDude@reddit
Don't be obtuse. You can totally pay to have 3 shifts going at a job site or suppliers to fill your order first. Obviously there are limits, but you can totally throw money around to move a project faster.
Opposite_Elephant573@reddit
Sure because everyone can learn how to build a 14 nm fab in a month or two and no other company has thought of expanding their fabs and others have no money to throw around so it's totally a buyer's market now.
Strazdas1@reddit
Micron, SK Hynix and Samsung already know how to build a 14 nm fab.
Or are you saying its not possible to find more people who can, say, weld iron structures for the fab housing and that is the bottleneck?
Opposite_Elephant573@reddit
Setting up and running a fab requires a lot of people with an engineering degree and specialized training.
Remind me please where and when did I say that?
Welding pieces of iron together doesn't get you a machine that turns raw silicon into integrated circuits.
Strazdas1@reddit
Buying one from ASML does, and thats pretty much the only thing that does.
Opposite_Elephant573@reddit
Now you've identified a big part of the problem.
I read (OK skimmed through) the 2024 annual report of ASML.
When demand incrased around 2020, it took them three years to clear their backlog. Then they scaled back production.
Now demand is increasing again, so guess what's happening to their lead time.
Apart from that, setting up their equipment takes time too. Then you'd still have to train people how to run it.
AwesomeWhiteDude@reddit
What the actual fuck is the point you're trying to make
Opposite_Elephant573@reddit
My actual fucking points are that
- You need a small army of specialized engineers to build a fab. There are only so many engineers at the moment, turning fresh high school graduates into engineers takes a couple of years. Throwing money at the problem, i.e. hiring them away from others doesn't work because 1. other chipmakers need them too and have the money to throw around to keep them 2. non compete clauses.
- About the same goes for the suppliers that make the machinery that go into a chip fab. They too need an army of specialized engineers to design, build and keep stuff running.
- Suppliers would of course love some extra cash in exchange for prioritizing your orders but they have other customers with pockets as deep as yours who want their orders prioritized.
General_Session_4450@reddit
I was under the impression that fabs are already running 24/7 at capacity, and the only way to increase supply is to build new fabs or upgrade/convert existing ones?
A-BOMB_NOT-REAL@reddit
So not wanting to over invest because of a bubble means artificial scarcity or price fixing. Am I understanding that right? You'd think for how desperate these gamers want this bubble to burst they'd understand that. But I'm guessing it's just that they feel entitled to be spared from the commercial side of computing. I wouldn't say no to cheap hardware either but that's why I engage politically instead of grumbling about how "it isn't fair, there has to be foul play!". Guess what? That's capitalism for you. No foul play needed.
1998marcom@reddit
It's not just capitalism, under any system there would be some form of inconvenience when having to decide "do we build an extra factory or not?". Unless you are already sure 100% of what will be of the AI momentum. In that case, you can voice your opinion right now by shorting/longing micron/nvidia.
AwesomeWhiteDude@reddit
No dude. That is not price fixing at all nor am I implying that.
My point is if there will be price fixing it will happen after the bubble pops and demand evaporates.
A-BOMB_NOT-REAL@reddit
Was mostly using you a post. I think you're more or less right. Just wanted to expand my original comment. Sorry for any confusion
Cable_Salad@reddit
Come on man. He just meant they won't lower prices afterwards. He literally says that the current situation is due to demand.
DerpSenpai@reddit
A lot of people on this sub are simply PC enthusiasts who only care about DIY and don't know how anything economics or hardware actually works. So Supply and Demand is instantly = price fixing
kearkan@reddit
Because there's no "rushing" expansion, it takes years and the expectation is that the bubble will pop and demand will cool.
Why would a company spend millions now setting up a new fab for a market that they think isn't going to exist when construction is finished?
DerpSenpai@reddit
Its' not millions, it's billions
kearkan@reddit
True
pinezatos@reddit
RAM manufacturers have been fined by the EU a few times, i don't see why it wouldn't happen again
Strazdas1@reddit
25 years ago.
A-BOMB_NOT-REAL@reddit
That's true. But when there's a more simple explanation (ai being an all consuming black hole and ready to burst at any moment) you're going to need evidence of it happening.
Strazdas1@reddit
Evidence? we dont need no evidence. We demand to be outraged and blame the largest company we can find.
Dpek1234@reddit
Iirc didnt ai companys buy ram even just so their competitor doesnt have it?
DerpSenpai@reddit
AI Server companies have been buying tons of DRAM, supply went down and every company started a bank run on DRAM
Tyrone-Rugen@reddit
The article states that they are actually increasing capacity for HBM and SOCAMM to meet the increased demand from AI
Malygos_Spellweaver@reddit
I hope Michael Burry is right and this bubble is bigger than the dot com. Once companies can't afford to run this full speed, let's see who they will want to sell components to.
Strazdas1@reddit
so you want a massive recession? why?
djm07231@reddit
If you look at the Price to Earnings ratios, the AI stock prices are pretty subdued compared to the dot com bubble days.
FT did a story and they found that the size of the "bubble" is still relatively small compared to revenue/profits.
Nvidia the darling of the recent rush has price-to-forward-earnings ratio of about 25. Historically forward P/E ratios have been around 10\~20 for large caps. So this is a bit high, but far from being dangerous bubble territory.
So it seems still quite possible there is more room for this to continue.
https://www.ft.com/content/21f59bee-8747-4a44-b992-336ef4c5157f
Yojik_Vkarmane@reddit
China is going to enter the chat and this whole cartel will sink to the bottom. They are all digging their own grave right now and don't realize it yet.
imjunsul@reddit
Yes because we know more than they do
Xurbax@reddit
Yeah, I think this is what is going to happen also. The question is how long it takes them to really ramp up and deliver worldwide...
mycall@reddit
Also, China is at best 16nm and isn't that competitive right now.
Strazdas1@reddit
Current CXMT memory chips are 26 nm.
Flavaz@reddit
I’ve been thinking about this a lot, really high prices will make “inferior” ram sticks economical to produce, then as with many business the virtual cycle of growth/improvement begins
onecoolcrudedude@reddit
console time, pc plebs!
Strazdas1@reddit
The consoles that also increased their prices?
onecoolcrudedude@reddit
not as much. 50 to 100 bucks on average.
the pc world is way worse, with ram, ssd, and gpu prices all routinely going up individually.
Strazdas1@reddit
In percentage of total price its about the same.
onecoolcrudedude@reddit
I dont recall consoles getting hundreds of dollars more expensive.
pc parts have however.
Strazdas1@reddit
Read my comment again.
HisDivineOrder@reddit
Funny you think consoles will fare any better about memory.
onecoolcrudedude@reddit
slightly! thats the power of a closed ecosystem where the manufacturer buys tons of stock in bulk!
but dont worry my friend, the console master race welcomes you with open arms!
Olafthehorrible@reddit
Looks like my 9900k/2080 rig is gonna need to last me through that too.
YookaBaybee24@reddit
I can see your Intel Core i9-9900K &GeForce RTX 2080 being useful beyond 2028.
superkickstart@reddit
"We are planning to artificially limit the supply so that we can raise the prices to whatever we want"
ezkeles@reddit
china : hold my beer
AwesomeWhiteDude@reddit
Do you really think they'll swoop into the broader consumer market tho? If anything I'd expect their capacity to go to DDR5/HBM for the Chinese AI market, or for the export of their supply to be very limited.
Strazdas1@reddit
CXMT is currently building a new fab in Wuhan. It is intended for HBM.
ezkeles@reddit
oh they will. if they want maximum profit they wont make 60 dollar phone new when america company like google or apple wont even make 100 dollar phone. or at solar panel. or monitor... do you think america company will make new mnitor 240 hz only 90 dollar? china does sell that. or electric car
once china can produce something, that product will be CHEAP to the point need gov limit their sales
AwesomeWhiteDude@reddit
What the hell are you talking about? CXMT doesn't make phones and monitors.
ezkeles@reddit
rrrr, other china factory like xiaomi? what i mean "they" it mean china
AwesomeWhiteDude@reddit
What? No. I’m talking about China’s AI industry also consuming as much of the wafer supply of CXMT like OpenAI, Google, and Meta are for Micron, SkHinix, and Samsung.
Like people seem to think CXMT is going to swoop in and save consumer DRAM prices for their gaming PC. When it’s more likely China’s AI industry will take that or more likely the Chinese government will limit the export of those DRAM and NAND chips since you know, everything has memory.
Strazdas1@reddit
CXMT: why is noone buying my memory modules with 26 nm controllers that run hotter than the sun?
neverpost4@reddit
It is curious that despite all the announcements of the Chinese almost catching up to the triopoly, no market impact, even in China.bEutger
hackenclaw@reddit
because the corporate slave call USA gov are limiting CXMT from getting parts to expand their production.
If CXMT can order as many Semiconductor manufacturing machine as they can, they probably eating these 3 guy's market share at rapid pace now.
neverpost4@reddit
Also the tiff with Japanese is causing photoregist outage.
IANVS@reddit
The baker tells you there might be a shortage of bread, while he is the one making it...
HotRoderX@reddit
that's almost correct.... except the king just ordered all the bread in the kingdom be delivered to the castle for the foreseeable future.
AnechoidalChamber@reddit
King is also just gonna store it and tell the people to eat cake.
Strazdas1@reddit
The King is trying to eat it but his mouth is too think to fit it all in.
mycall@reddit
Jokes on the King as there is no long term storage for all of the bread which will go stale.
djm07231@reddit
The bottleneck is fab/cleanroom capacity which would be the ovens in this analogy.
The "baker" cannot do much when there is only so much ovens and installing a new oven takes 3 years and billions of dollars, at which point the price would have come down.
A-BOMB_NOT-REAL@reddit
Has there actually been any evidence of them limiting their production capacity? Because all I've seen is that AI seemingly has unlimited money and demand that outstrips supply.
PloddingClot@reddit
Price fixing cartel says what?
Pretty-Emphasis8160@reddit
what was the fine they faced last time this happened? This time will be even cheaper if they get one at all
Strazdas1@reddit
If you mean 2018 then they were found not guilty and there was no fine. If you mean the 1998 then i dont remmeber but it wasnt much.
omega552003@reddit
Just lobby a couple of congressmen and it's not a legal issue
InvincibleWallaby@reddit
They don't need to as part of the korean big 5, they hold more power than the president
doneandtired2014@reddit
That was in the "before before" times.
In the current era, there's no need to tempt congress with campaign contributions or future executive positions. All they have to do is send the POTUS a bribe directly and all will be forgiven.
PloddingClot@reddit
Spray paint a cat toy gold and you're good.
StatusBard@reddit
Who’s gonna issue the fine? The other criminals?
SagittaryX@reddit
I doubt it, demand is honestly just crazy for the upcoming few years. Main hope is that AI craze lessens next year (some cracks showing already), which will hopefully decrease datacenter demand. But even that does happen, they are going to ride this price increase for a while, wait for prices to slowly settle again.
neverpost4@reddit
If it is too expensive, buy Motorola Android Phone. do not buy an iPhone.
3VRMS@reddit
Apple has started to look very reasonable in pricing recently when it comes to RAM...
NewKitchenFixtures@reddit
Sounds like wishful thinking but we’ll see.
Vb_33@reddit
So they are deliberately not increasing production unlike previous occasions where dram demand was high. Will be interesting to see if there's any downsides to this for their business.
NewKitchenFixtures@reddit
It theoretically works as long as everyone is cooperating and holds the line.
TheBraveGallade@reddit
Even if someone breaks and increases production, if the crash happens vefore they can properly utilize said capacity they'd be the one more in thebhole then the ones that did not.
NewKitchenFixtures@reddit
That’s why I kind of expect the first to expand a lot to do it off government funding.
mack0409@reddit
I suspect manufacturers are all in agreement that the AI bubble would burst before they managed to recoup the costs of increasing production
phylter99@reddit
Setting exceptions like this is to keep prices high.
Escudo777@reddit
Luckily I neither have the money nor the time to play games.
n19htmare@reddit
These memory companies WANT and NEED the appearance of tight supply to keep their margins and AI interest high for longer period. Is it going to last 3+ years? Who knows but they will pretend that it exists to continue their higher margins.
So take whatever they are saying with a grain of salt.
nezeta@reddit
Honestly, these 3 vendors just seem to be giving excuses for overpricing. I understand that GDDR supply might tighten due to the AI bubble, but I can't fathom why DDR or even SSDs, which are basically made in completely different factories, would also become tight.
shadowtheimpure@reddit
Most (decent) SSDs have RAM onboard as a cache to increase performance.
Rentta@reddit
The most sold SSD's are usually DRAM:less
RunForYourTools@reddit
In 3/6 months we will have chinese brands flooding and dumping the market, then lets see what these piece of shit companies will do about it
Dpek1234@reddit
Fabs take years to make
Wait_for_BM@reddit
In case you haven't noticed, large SSD and even spinning rust are affected by this AI craze as they are used in data center for hogging the internet contents for those AI training models. AI companies are modern day large scale pirates hogging materials except they don't get punished.
DDR are fab on a chip production line that can be easily configured for a different die for making the DRAM that are used for HBM. It is much easier to convert production lines than building a new fab.
tomzi9999@reddit
Don't worry OpenAI will go bust before that, buble will burst and RAM and GPUs will be cheap as shit.
Yojik_Vkarmane@reddit
None of this going to happen, but China will sink them all to the bottom.
hieronymous-cowherd@reddit
Why don't we have both?
Diplomatic_Barbarian@reddit
"Forecasts" AKA "we won't increase production because we want to keep the margins sky high".
Such clairvoyance.
SirMaster@reddit
Nothing to do with margins. If they knew there would be lasting demand they would certainly build more supply. But they strongly think the demand won’t last long enough to make use of a new plant.
Neverending_Rain@reddit
There isn't just a dial they can turn to instantly increase production. Maybe there's room for some increases if the fabs weren't running at full capacity before, but after that it'll take years and billions of dollars to build new fabs to increase production. That's a risky investment to make with how much AI looks like a bubble right now.
DerpSenpai@reddit
They are increasing production where they can, but they are not making new fabs that they weren't planning because it takes billions of $ and 4 years, when the demand is nowhere to be seen
kearkan@reddit
They won't increase production because they're expecting demand to drop before any construction on new manufacturing is completed.
That's lie paying to build a bigger beer garden because it's sunny this week, when the forecast is rain for the next three months.
Homerlncognito@reddit
Increasing production doesn't make sense if they're assuming that the demand will drop in few years.
surf_greatriver_v4@reddit
memory supplier tells us it will make memory supply tight until at least 2029
PeksyTiger@reddit
Don't worry they'll find something else to scam us with by then.
odrea@reddit
so will buy a new pc in 2028, got it
happyzor@reddit
I got 64gb of DDR4 in 2019. That's going to last me for a decade at this point.
LLMprophet@reddit
I got 64GB DDR5 in July so I lucked out on build timing.
Primary_Olive_5444@reddit
more asml machine installaion.. maybe gains from ASML will offset dram cost. At least in a capitalistic world, you have the options to invest. And hopefully be good on the timing,entry and profit taking
With each installation, ASML also makes revenue from machine servicing and maintenance.
ezkeles@reddit
at this point we can only hope to china grace us with affordable ram and memory, like they provide us cheap monitor and other product.....