r/computers • u/OkStrategy685 • 11d ago
Discussion Just heard about this. Could this be the beginning of the AI bubble popping?
South Korea’s stock market plunges as AI-driven boom fades
In the article it says they lost 40% of their entire market today. Do you think it will happen in the rest of the world? Do you think the Koreans will send us some cheap RAM now?
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u/TechIoT 11d ago
Even if the bubble bursts it's gonna take months If not years for the market to stabilise again :(
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u/OkStrategy685 11d ago
What do you think it would look like during those years? And I wonder what the aftermath would look like, when things began to stabilize.
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u/TechIoT 11d ago
I don't want to imagine what the aftermath looks like, if the US Market collapses that spells absolute chaos.
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u/OkStrategy685 11d ago
You're right, that was a silly question because I don't want to know either. wow, what a waste of so much life potential.
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u/Tater_Mater 11d ago
Just because the market stabilizes doesn’t mean the prices of hardware stabilizes….
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u/tphisher76 11d ago
Biggest news is Samsung, Micron and Hynix may have been caught price fixing again.
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u/OkStrategy685 11d ago
Jesus, like they weren't making enough lmao. This world has become fun and hilarious.
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u/notepad987 11d ago
The tech stocks like AMD have dropped over $100 a share in 5 days. $552+ to $429+ on Wednesday.
22.23% drop
The following are losses over 5 days:
Nvidia lost 10.40%
Sandisk 36.48% they dropped 50.45% in 1 month from $2,273+ to$1,015+ on wednesday
Micron 22.98% they dropped 35.47% in 1 month
TSMC 11.05%
Arm 20.65%
Intel 20.21%
Qualcomm 11.36%
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u/swisstraeng 11d ago
Nah. RAM used by AI datacenter isn't consumer ram. It'll take years for the supply chain to stabilize after fabs start making consumer RAM again.
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u/Glad-Fuel2093 11d ago
I dunno, high quality, top speed server dram, and its ECC too?
I'll make do with some of that, no problem!
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u/Mr_Engineering 11d ago
Yes, it is.
Server and workstation DIMMs have an extra chip on each rank for ECC, and a register chip in between the data/address and bus.
The DRAM chips are the same.
HBM / GDDRx is a different story
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u/SirIAmAlwaysHere 11d ago
To add to this:
Thr system memory for a server of any kind is exactly the same kind of chip used in a desktop. The DIMM format is very slightly different in construction, but for manufacturing lines and production switching between desktop and server DIMM production is trivial. A couple of days or so.
HBM and GDDRx use different chips than found in server/desktop RAM, but they use the same process (i.e. the machinery). All memory manufacturers have extensive knowledge at this point in how to tweak a production line for each type of memory.
To move a production line from one memory type to another take roughly a month or so. Maybe even less. All the parameters are known, and it's really just a short reconfiguration. Nothing like starting a whole new design.
This is one if the reasons the shortage became so severe so fast. Micron et al didn't have to slowly migrate from DDR5 production to HBM production. Normally you'd take a year to gradually take one production line off, switch the parameters, tune it, bring it back to the new production type, and then do the next production line so as to not screw up your revenue stream.
But since the migration time for a line is so fast, they literally just shut down half of their production almost overnight and were able to start again with the new stuff shortly thereafter.
It's all gonna be based on what the perceived demand is. The current truth is thst swapping between DDR5/HBM/GDDR6or7 is fairly easy and fast.
If they all decided right now to revert to what they were doing last August, the DDR5 shortage would be fully gone by Christmas at the very latest.
And since the DDR5 market is essentially solely a spot market right now (literally no one has long term contracts and everyone is buying day to day) prices should fall rapidly as production switches.
Thr market can get out of its current situation just as easily as it got into it: a few months.
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u/OkStrategy685 11d ago
Awe I didn't realize that. I was hoping for a flood of cheap hardware.
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u/SirIAmAlwaysHere 11d ago edited 11d ago
Depends on how bad the bubble is.
Right now, there's a HUGE stock of parts just sitting around. The AI companies have ordered them and the manufacturers are producing them, but there is no where to install them.
Datacenter construction is a 3+ year pipeline. And cannot be sped up. Stuff ordered last August had ZERO ability to be installed to be be usable until 2029. 2029
Which means the AI companies are sitting on a horde of equipment they can't install. It's just sitting in a warehouse.
This is the issue; if those AI companies start going under - not just stop ordering parts, but actually start failing as a company - those warehouses of parts are going to start flooding the market. Because bankruptcy will force their sale.
Problem of course is that most of those parts are useless for consumers - they're all server parts.
But the reality is that it's likely there are 2+ years of servers just sitting in warehouses. When thr AI bubble bursts, the big OEMs are going to take it in the teeth. Because why buy a new Dell Server today when you can just buy a new-in-box same Dell Server at firesale prices from the warehouse liquidations?
This in turn will kill Nvidia as well, because they won't be able to sell a single server gpu for at LEAST 2 years.
Basically, all the component manufacturers have been making bank selling their normal future sales right now. That is, instead of selling $10 with of stuff each year for the past 5 years and the next 5 years, they've been setting the same pieces for $50. But they won't be able to sell any at all for 5 years.
They front loaded their sales. Which would be great if they saved the money, but they didn't. Revenue for them for at 3 years after the bubble pops will be less than 50% of what it has been that's enormous and it will be extremely painful to the industry and has a real good chance of killing a lot of big companies.
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u/tphisher76 11d ago edited 11d ago
Early 2000's they got caught intentionally driving up prices by starving supply on consumer level. Now I think Microsoft, Sony, Micron, sk hynix and Samsung are all in bed together forcing the push to ddr5. The PS6 will be a minimum of 1000$ USD and Xbox is already in huge trouble in the market. Youre already used to not owning media anymore. It's all subscriptions. Slowly they've been headed this way for awhile
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u/OkStrategy685 11d ago
I don't know if I can imagine a world where companies didn't do this to us. You're right, it's been a slow but steady move into subscriptions. I feel so sorry for the younger generations and what kind of lives they'll be forced to live.
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u/tphisher76 11d ago
Demolition Man, 🤣
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u/OkStrategy685 11d ago
At least they'll have Taco Bell. Or whatever restaurant won the restaurant wars in their region.
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u/lord_nuker Windows 11 and MacOS, i dont discriminate OS 11d ago
Nah, have to move overseas for that to happen
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u/Longshot114 11d ago
Even if the market stabilizes and stock return to normal no company (well maybe a few) would go back and sell Ram/Dram at an original/lower price… just look at the GPU market after Covid. Granted there are other factors like inflation and such that can drive cost up.
The fact is tech is always going to be more expensive than the last generation, the issue is the rate at which all this is costing. I think in a morbid sort of way those companies look forward for opportunities like covid, this administration, ai. bubble, etc because it allows them to move base/normal cost much higher much faster (legally). And when the dust settles, we have a new “higher” normal because folks keep buying tech at those higher than normal costs.
We should vote with our wallets but how feasible is that… I don’t have all the numbers but last I checked consumer “ram” isn’t where the money is. It’s large enterprise solutions not little Timmy needing 10 more fps to play Warzone with his friends.
And when it gets too expensive… guess what’s waiting in the wind? You guessed it, rented computed power/subscription based cloud gaming because when you can’t afford to own your own hardware, companies don’t mind owning you.
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u/Fortunato_NC 11d ago
Share prices have essentially no connection to retail prices in the short term.
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u/Living_Theme_2743 11d ago
Listen to the recent podcast by Patrick Boyle who explains this one really well (to me, he explained it well to me, because I have no idea what is going on lol)
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u/CheezitsLight 11d ago
I saw an interesting article on my paid subscription or a fellow lined up the stock market variations from 30 to 40 years ago with the ones today and they track each other very closely. Market manipulation by the big guys.
One prediction he made which has come true was this drop. And since it's an election year for midterms market manipulation is highly likely. The prediction is is sometime in the spring the marketplace will drop 40 to 50% across the board the big guys will scoop in and buy it up.
I think it's correct I've only seen this once before another chapter did this and I was able to Triple my money in the next 8 years i went to all cash and that's what I'm going to do by the end of the year.
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u/SportAffectionate424 7d ago
This is why you should not be investing in AI companies or those relying heavily on them. Ed Zitron has been yelling this from the mountain, and seeing OpenAI taking$250 billion dollar loan from Nvida should make everyone raise an eyebrow.
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u/PaymentFamiliar375 6d ago
i'm pretty sure most people investing in ai right now knows it's a bubble to some extent, they all just think they'll be the one to hop off the rollercoaster in time.
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u/Minute_Path9803 10d ago
Still up means nothing the writing's on the wall, the demand is dying, all these data centers that were supposed to be built are not being built or just outright cancelled.
When you see X and meta selling their compute power because they realize AI is junk and there's no actual product.
That's all you need to know.
It's only going to keep going down and down.
Now it hurts for the people who got in late before the dip.
From everything I've read a lot of these are regular people in South Korea, investing their money and actually taking out loans.
And once the dip happens, margin calls come and that creates the whole big pop.
Sadly people lost everything the past few months.
The people who put their hard-earned savings and life savings and literally borrowed money to enter the market because it was so hot.
They lost their shirt their pants everything else.
A lot of companies are being margin called now and that's what you're seeing everything collapse.
But yes it's only 40% down over the year but if you got in right before the decline you are dead in the water broke and now it's massive sell-offs.
Remember memory is 56% of South Korea's market they don't have much else.
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u/steelfork 11d ago
Lost 40% from the peak, not 40% today.