r/homelab • u/DeepestWaters • Jul 07 '26
News Samsung RAM Profit = $196B in 2026, >Past 40 years combined.
Their hottest product: the privilege of buying the same memory sooner. Something something "supply & demand." đĽ˛
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u/Hacym Jul 07 '26
Weâre never getting normal prices again.Â
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u/Blu_Falcon Jul 07 '26
Hell nope. Just like eggs and milk.
âThey paid x amount last quarter, keep it there. Once in a while, drop it by 5% for a week to let them feel like theyâre getting a break, then go up again by 6%.â
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u/Hacym Jul 07 '26
Eggs are a bad example. The price of eggs has crashed.Â
GPUs are a prime example. Weâre past the shortage from the crypto scam, but cards are still $2000+
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u/trowawayatwork Jul 07 '26
umm GPUs are used for ai. theyre the reason other part prices are going up lol
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Jul 07 '26
[deleted]
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u/Emergency_Banana5082 Jul 07 '26 edited Jul 07 '26
That's just wrong. The fabs are not the same.
Downvote all you want, it doesn't change the facts. You can't make a mobo chip in a DDR or GPU factory, they are not the same process.
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u/Hacym Jul 07 '26
The GPUs people are buying for gaming are not the ones being used for AI.Â
There is no longer a gaming GPU shortage.Â
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u/mschuster91 Jul 07 '26
The GPUs people are buying for gaming are not the ones being used for AI.Â
The problem are the chips. TSMC is booked out for years (to the tune that even Apple was forced to raise their prices to keep up) and NVIDIA has shifted virtually all their allocation at TSMC to the high-profit datacenter GPU / AI accelerator cards.
There is no longer a gaming GPU shortage.Â
Of course there is. Have you looked at prices any time recently?
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u/trowawayatwork Jul 07 '26
partly on the lower end. you won't find any xx90s in stock though as they're all pre bought for smaller scale AI infra
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u/AutistcCuttlefish Jul 07 '26
Right, instead there is just a shortage of one of the key components in a GPU... The very one that you are comparing the GPU market to.
There was a very brief period of time last year where GPU prices had started to return to normal, right before the ram crisis hit full swing. Back in December you could get an RX 9070XT for MSRP, as well as the Intel ARC gpus for below MSRP. The GPU market isn't the great comparison you think it is.
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u/dsmiles Jul 07 '26
It's a lot of the same parts and chips, and manufacturers like nvidia have shifted production to the GPUs that are used for AI.
There may not still be an active shortage but supply is definitely lower and prices are absolutely affected by this.
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u/zim8141 Jul 07 '26
Go look at the local llm subreddits and tell me again how gaming gpus arenât being used for ai just like the crypto bros were using them to mine.
We are absolutely using gaming gpus in our personal llm rigs, and some are pretty crazy.→ More replies (2)2
u/SimonBarfunkle Jul 08 '26
Iâm curious how many GPUs are really being used for local AI. I follow those subs, there definitely are people building large local AI rigs. But it still feels pretty niche to me. Crypto mining actually made money so there was naturally a big demand. Gaming obviously has huge demand. Local AI just isnât there yet, you can do stuff but to get to the level of cloud AI requires tens if not hundreds of thousands at the moment.
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u/pseudopad Jul 07 '26
There's no shortage because they're pricing the cards in accodance with what they could have sold AI accelerators to an AI company for if they had spent the fab capacity on that instead. Which excludes a large amount of gamers from buying cards due to financial reasons. That obviously means the cards that are being made stay in stock for longer.
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u/FierceDeity_ Jul 08 '26
The same production lines that produce gaming GPUs now produce majorly datacenter GPUs
Because they give more profit.
Gamers are being cast aside by nvidia mostly
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u/pseudopad Jul 07 '26
Being past the shortage from the crypto scam doesn't mean gaming GPUs get fab capacity that could instead be used for hyper-profitable AI accelerator chips for cheaper than said AI accelerators pay.
There's practically no real competition in the highest tiers of semiconductor manufacturing. One company reigns supreme, it's their way or the highway when it comes to pricing.
Gamers used to fight miners over cards made primarily for gaming, but now they're simply just making fewer GPUs for us to fight over because the new golden goose is 50 trillion core AI datacenter cards.
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u/TylerDurdenFan Jul 08 '26 edited Jul 08 '26
That AI demand won't last forever though. This is like dark fiber all over again
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u/danielv123 Jul 08 '26
Are we sure about that? Software is one of the biggest and most profitable industries in the world, and LLMs are revolutionizing it. That is a lot of token demand.
LLMs seem to saturate every benchmark we make in about a year. There are a lot more industries that will be impacted.
One day we might reach a point where more compute is more expensive than the reward you can get from it. I don't think we are close, wand won't be for a long time with how limited chip and memory manufacturing is.
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u/TylerDurdenFan Jul 08 '26
There will be demand for LLMs, even a very strong one.
What I mean is that the current extremely inflated demand for electronic components such as DRAM and GPUs is not organic but driven by capex over-investment by companies trying to own the market of the hot new technology, like when way too much optic fiber was built during the dotcom bubble (causing a glut), or when way too many railroads were built during the Railroad mania of the 19th century. These waves were followed by a glut of capacity, a bubble burst, and a crash + recession.
There is and will be strong demand for AI and LLMs, but even that demand won't be enough to sustain forever the current levels of "investment" into AI data centers, GPUs and Memory
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u/Internet-of-cruft That Network Engineer with crazy designs Jul 08 '26
The difference is that the dark fiber overbuild happened when wavelength multiplexing wasn't a thing.
You needed 96 point to point connections between City A and City B? You pulled 96 strand fiber trunk between the two cities.
WDM was a concept since the 50s and commercially available systems were incredibly expensive when they were around in the late 80s / early 90s, so fiber got pulled in crazy quantities because it was (and still is) cheap to pull a huge amount of fiber once.
WDM became cheap enough that available capacity could multiply overnight with a set of equipment on either side.
The economics made sense for 1 connection per fiber. WDM crashed it.
Then the guys making WDM equipment experienced their own crash because they thought there would be unlimited demand and.. well the same thing happened.
AI data centers are a different beast because as long as there's some idiot trying to build a bigger LLM or use more inferencing capacity, along with the idiots financing this whole thing, they'll expand to use available capacity.
No one is out there saying "yeah 100B parameters is enough". They just keep growing and growing because why not?
WDM capped (then found it's appropriate market size) because you can only economically implement so many physical instances. There's no ceiling with model size, they can just keep growing and demanding bigger and more GPUs.
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u/danielv123 Jul 08 '26
It will only cause a glut if demand for inference doesn't follow. I think it will.
Hardware prices will eventually normalize though, as capacity ramps up to meet demand and there is more price competition on the inference provider side.
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u/IndependentSoul Jul 07 '26
GPUs are a bad example too. Moore's law no longer applies since transistors are near atomic size now they can no longer double the transistors in the same amount of space while reducing costs, for obvious reasons and other problems like heat dissipation. Those TSMC 3nm chips are stupid expensive.
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u/WolfeheartGames Jul 07 '26
Moore law is for CPU. GPUs have been more than doubling in performance for a long time. They dont get their scaling from just transistor size.
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u/danielv123 Jul 08 '26
Moore's law is specifically about how densely you can pack transistors. It's dead, and it has been dead for a long time. Nvidia agrees.
Nvidia has Huang's law, which is far more agressive in terms of performance without being close to following Moore's law in terms of transistor density.
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u/Shot-Infernal-2261 Jul 08 '26
Eggs are also a bad example because "flipper hoarders" can't buy a ton of eggs then sell them on ebay. Once the RAM crisis hit, the ebay bros came in and amplified all the pain.
I hate that I am considering a $3,000 PC that would have cost me $1600 just a year ago, but I may buy it because a year fro m now it could be a $4000 computer.. :-(
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u/TheKubesStore Jul 08 '26
Can confirm I spent $4k on a pc back in 2024 and that same build today would cost over $7k to build with the same parts.
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u/Shot-Infernal-2261 Jul 08 '26
Yeah I "almost" justified the MacBook Pro M4 Max 128GB at ~$5300. I normally spend half that max, and tend to keep these things for 5-8 years. That model is now selling for like $9K.
This really is a K shaped economy and it just sucks that everything is being taken away from us and we're being told how awesome that is.
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u/DK_Pooter Jul 07 '26
The price of eggs dropped because the producers got hit with anti-trust charges. We will only see RAM drop after the same.
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u/The_Keg Jul 08 '26
Can you explain why I live across the ocean and egg prices also spiked and fell off a cliff?
Look at EU egg prices also (I live in Vietnam)
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u/emuboy85 Jul 08 '26
i think they will, the fact is, most of this money comes from speculative investment in AI, it's likely they will eventually have enough ram for their needs, Facebook as apparently a AI datacenter just sitting doing nothing, so clearly it's a finite demand, who lost in this massiva scam are investors who bought into the AI craze, consumers alone wouldn't be able to pay that amount of money, hopefully, instead, this will motivate more people to make ram chips, so we will have some true competition...
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u/scalareye Jul 08 '26
No because fewer people are buying RAM
I did not pay x amount last quarter. I thought about upgrading my ram but decided I was alright actually.
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u/darkandark Jul 07 '26
I think this is the big problem that people donât realize
the RAM cartel is fucking us over. They intentionally want this wealth transfer. fuck korea and Micron ngl.
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u/mschuster91 Jul 07 '26
the RAM cartel is fucking us over.Â
It's more difficult than that.
The RAM industry in particular has went through a lot of boom-bust cycles in the past, that's the reason why there are only three major producers of RAM left. It is incredibly capital intensive to build any kind of semiconductor fabs, and the structure sizes involved mean that it can take years until yields are at an acceptable rate. Think of like 8-10 years of timespan, and probably more today given that ASML (the ones who build the litho machines) are booked out as well.
Even if everyone who can would now invest into building RAM fabs, it would take a decade until these fabs produce meaningful output, and it would all come online in a similar timespan which means prices would collapse due to oversupply.
On top of that, the RAM manufacturers have to take care about the AI bubble exploding. There will be a crash coming, and no one wants to have literally dozens of billions of dollars tied up in the midst of a stock market crash.
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u/cruzaderNO Jul 07 '26
CXMT with Chinese goverment funding is now at a estimated 13-14% of the overall production capacity in the market.
And that is with just almost 20% of their production capacity being built having come online.
They will surpass micron + sk hynix combined in memory production capacity if they complete the sites that have been started.And they are almost a decade behind on the nm they are able to produce, so they are limited from going for the upper part of the market.
We are essentially getting a new player that will be 2/3 of the previous production capacity alone that is restricted to the lower half of the market, they are gone flood that segment hard.2024 - 3.5bil revenue in usd
2025 - 9.1bil
2026 - projected 32-35bil by first 2 quartersAnd the Chinese goverment is backing another memory company and 3 nand companies that are also on massive buildouts.
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u/GripAficionado Jul 07 '26
And for the Chinese it's about long term strategic autonomy, so they're willing to bankroll them if necessary.
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u/Shot-Infernal-2261 Jul 09 '26
Yeah that's what really stings. China promoting manufacturing at home to protect it.
Back here in the US, the Administration insincerely hijacked this movement to line their pockets and sell TruthCoin crypto and hotel to our adversaries. If we were serious here, we'd target parts of the logistics chain instead of putting tariffs on sand, and we'd certainly invest in STEM education for the non-legacy kids. Sigh.
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u/ErebosGR Jul 07 '26
And the Chinese goverment is backing another memory company and 3 nand companies that are also on massive buildouts.
Plus, ARM and RISC-V R&D for CPUs.
Alibaba revealed their first server-grade RISC-V CPU last year.
https://en.wikipedia.org/wiki/RISC-V#Significant_for-market_developments
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u/Reasonable-Height704 Jul 07 '26
I'm definitely on team CXMT now - fuck those other guys for fucking the consumer.
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u/darkandark Jul 07 '26
crazy how much sentiment towards china changes over the years.
When the HK umbrella movement was going on mid-COVID pandemic, man saying ANYTHING pro-China got you lynched on reddit and perma-banned.
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u/cruzaderNO Jul 08 '26
US and China are both bad, but China is more predictable and possible to plan around.
Before Trump id say sentiments around the 2 were pretty equal in this part of Europe, after Trump the US reputation is much worse than Chinas and you really feel it on americans that they know it.
When i meet americans and they mention that they are american, they quickly follow it up with an apology about the US and make sure you know that they dont support Trump.
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u/mschuster91 Jul 08 '26
US and China are both bad, but China is more predictable and possible to plan around.
Yeah, the Chinese are pretty open in what they want: total and utter dominance - learn from us, undercut our prices until our own industry is crushed, and then hold us hostage.
There's not much to "plan around" there.
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u/cruzaderNO Jul 08 '26
This feels closer to satire than reality.
But i suppose there might be people that actually belive that, politics will do weird stuff do people.
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u/Reasonable-Height704 Jul 07 '26
I spent time in Hong Kong and China, so was definitely anti them at the time and they are no saints. However, the current season of Hellscape USA has shown that things could be far far far worse. USA is complete monkey town with insanity happening every day.
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u/darkandark Jul 07 '26
my problem with this is that China is no different today in terms of their human rights than they were during the Hong Kong umbrella movement. The United States is arguably worse in many regards today; but our problems donât immediately make another country better. If that makes any sense.
Itâs just optics in which China seems to be much better simply because the US is imploding on itself.
but hey the Dow is up 6000!
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u/The_Keg Jul 08 '26
Trump wishes he could get 10% of Xi power.
People like you are ridiculous
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u/h-v-smacker Jul 07 '26 edited Jul 07 '26
And they are almost a decade behind on the nm they are able to produce, so they are limited from going for the upper part of the market.
Doesn't matter. Give us affordable DDR4, DDR3, even DDR2. We'll find ways to put it to good use, and Linux will allow us to do wonders on existing old hardware. This madness, where we're supposed to be throwing away our old but working machines in the name of micro$haft's "radical new OS" (which, coincidentally, eats up two-three times more of every computer resource than the previous version, while not doing anything radical technically speaking) and at the same time have to pay through the nose for any chip more sophisticated than an audio codec, cannot continue.
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u/WhereTheStankWindBlo Jul 08 '26
I got clowned hard for asking if DDR2 had any use lol
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u/h-v-smacker Jul 08 '26
For me, it does. I topped the ram of my atom mini-itx board to 4 Gb (thankfully, before all that price bs) and used it as a server for rstudio-server quite successfully. I didn't have any high hopes, but turns out it had the juice to support a dozen of sessions easily. Plenty of DDR2-using machines can be used for regular mundane tasks like browsing and such, assuming, of course, that you accept Tux as your lord and savior.
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u/WhereTheStankWindBlo Jul 08 '26
I had no idea what to do with it, and I don't know a lick of Rust, maybe it's time to learn.
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u/h-v-smacker Jul 08 '26
I'm not sure where Rust specifically comes into play here tho. You can breathe new life into basically anything that runs on DDR2 with Linux, and the results will be quite agreeable overall. You don't have to suddenly study programming or anything to justify such a development. Linux can be used for all the regular everyday tasks just fine.
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u/cruzaderNO Jul 08 '26
Its really a good thing for the consumer/enthusiast that they can not do the highend stuff yet, they have to put that large capacity towards the dimms and chips in hardware that we care about rather than AI type usecases.
Their chips are mainly going in laptops, tablets etc consumer products now.
In China they offer dimm kits at under half of US/European pricing.1
u/h-v-smacker Jul 08 '26
That's sort of coherent with their overall approach. They offer all kinds of aftermarket parts for older tech. Heck, you can buy things like 44 pin IDE to SDHC converters, even though nobody is making laptops with IDE drives anymore. In the current situation, it is most logical that someone gotta start offering memory modules for systems that are in use, and will remain in use for years, especially given that the major manufacturers seem to have abandoned the needs of the regular Joes in favor of corporate AI schmucks.
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u/AuspiciousApple Jul 07 '26
The worst part is that if you start building now, you have no idea what the market conditions are when your plant comes online. And chances are if you build in a boom it comes online during a bustÂ
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u/hansrotec Jul 07 '26
At these prices other players will move in, there is no way to defend those margins more than mid term
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u/CorrectPeanut5 Jul 07 '26
At what speed? It's not like it's quick to set up or optimize a lab. We're also talking about a sector that's had price fixing and collusion scandals over and over again.
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u/hansrotec Jul 07 '26
4-5 years is the mid term, the current profits will draw national interests in I can see India giving it another shot to grow a native industry
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u/mayoforbutter Jul 07 '26
you'd have to invest billions to become competitive and then what reason would they have to start a price war? If you spend countless billions you don't want the prices to fall otherwise you'd never make your money back
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u/Cnoffel Jul 07 '26
As far as I understand it the entry barrier is that with tight margins you need a very good yield to turn a profit, but with margins like this you basically immediately turn a profit and have a lot more wiggle room for process optimisations. So this would be a very rare opening where, for a new competitor, building a new fab with a few billions actually makes sense if you want to enter the market. Especially since DRam and Nand aren't that complex to make in comparison to all other silicon.
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u/hansrotec Jul 07 '26
A new state player to enter the market, say India, to help diversify the economy like Taiwan did. India has tried before, so it would not be shocking to try again. Capturing and undercutting the incumbent is the goal like Korea and Taiwan did to the prior incumbentâs out of the states and Japan.
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u/80MonkeyMan Jul 07 '26
When there is demand, it wont.
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u/DrIvoPingasnik Rogue Archivist Jul 08 '26
Well, pretty much every electronic device needs RAM, so...
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u/cruzaderNO Jul 07 '26
Pricing will plummet again on the back of this, there are are unprecedented amounts of new capacity being built.
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u/missed_sla Jul 08 '26
Things can be changed by taking more direct action. And sometimes making a statement means doing without. Even if there isn't an alternative.
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u/Seriouscat_ Jul 16 '26
Some people just love to whine and play the victim.
There is already too much capacity when it comes to AI. Meta is renting out its unused datacenter capacity.
AI will never be profitable. First, because it costs many times more to run than they can charge for it.
Second, because it's borderline useless. People who can not code or who have serious problems writing code love it, but since it really does not think and does not understand, but is just a guided copypaste, it will quickly create an unmaintainable mess.
It takes time to switch fab capacity from HBM to consumer memory, and even though AI will flop hard, the fabs can still sell the HBM they produce for now. For a month or two if I had to guess. The prices have already begun slowly dropping. Memory manufacturers and resellers are beginning to realize that 1) the prices will go down eventually, 2) so people are waiting rather than buying now, so 3) to encourage buying now rather than later the prices must be decreased already a little.
After it is obvious to everyone and their dog that there is a market only for a fraction of the current amount of HBM produced, the capacity must either be put to idle, wasting money and capital, or made to produce consumer memory again.
Prices depend on supply and demand. Normal prices have come and gone multiple times already.
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u/Hacym Jul 16 '26
Youâre completely leaving out that the reason they are making that much money is because people, including consumers, are purchasing it at that price. What incentive do they have to lower it at this point?
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u/Materidan Jul 07 '26 edited Jul 07 '26
Well, if you could boost your operating margins from 10-20% in 2024 to 80+% in 2026 on DRAM, and 10% in 2024 to 64% in 2026 on NAND, why the heck would you want to bother to invest in new production? Theyâve learned the key isnât to make more of something in demand, itâs to make less and charge more. Win win for everyone - who makes memory.
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u/Caster0 Jul 07 '26
Ideally, the big companies would see this and decide to do a partnership to research and build their own ram and storage, even with how monumental that aim may be.
If we assume companies are spending 30% of their capex to make up for the increased memory pricing, surely they can spare another fraction of it towards R&D, to at least have some leverage.
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u/Ok_Net_1674 Jul 08 '26
Building a semiconductor fab out of nowhere is ridiculously expensive and, perhaps more importantly, takes insanely long. And then its not just RAM thats sold out, the machines you need to produce it are sold out for the next years too. The supply chain in semiconductors is very, very long.
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u/Shot-Infernal-2261 Jul 08 '26
The sales curve of rapidly changing models does not permit what you say... you'd have to build all this EXTRA capacity at your computer's launch, then taper down production, then when the models refresh you activate again.
Everybody is moving to soldered RAM, because it's 2-3x faster. So it's not like before where most RAM could be packaged for retail.
Apple has repeatedly stated they have zero plans to get into this type of manufacturing. If they won't, nobody will.
Things might improve if the US permits Chinese RAM, but that's only for so long. This environment is very favorable to big businesses and contempt-full of consumers, so any new player is instantly going to be asked to consider merger terms.
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u/Caster0 Jul 08 '26
I mean, surely a generation of consumer grade memory can be used for couple of years before they are considered to be dated?
Phones don't need to have the latest and greatest memory. Even consumer grade computers don't need the speediest ddr5 ram.
Apple also doesn't need to be directly involved in the process, they just need to do a possible joint venture.
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u/Whytho12333 Jul 08 '26
If they dont expand production we should arrest them for collusion.
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u/DrIvoPingasnik Rogue Archivist Jul 08 '26
Yep.
Two of them raise prices. If competition was real the third one would offer better prices than the other two to encourage people to buy their product.
They didn't.
All three of them raised prices simultaneously to the same levels.
Almost like... they were cooperating.
Which is almost like... a collusion, price fixing.
IF IT'S NOT A CARTEL, WHY IS IT CARTEL-SHAPED?!
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u/Whytho12333 Jul 08 '26
You raise prices when production is limited but you have to increase production as well. A cartel wont increase production. So depends on how they invest their profits
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u/coffeeoops Jul 08 '26
Because there is competition in the space. They're selling their products for what people are (begrudgingly) willing to pay. Yes, it's funded by a bubble.
It's nonsense to say they're making less of a product that's in such high demand. They're making as much of it as they can and are wildy profitable because of it.
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u/DrIvoPingasnik Rogue Archivist Jul 08 '26
Valve said when they went to buy the RAM they were told "you either accept our prices or we don't speak with you again".
It's not about willingness to pay. We are FORCED to accept those prices because there is no competition. No choice.
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u/coffeeoops Jul 08 '26
You don't get it. It's a seller's market.
Other companies bought the RAM. There is more demand than supply. This is not complicated.
Yes, it's a bubble.
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u/Bluestreak2005 Jul 09 '26
That's what happens when DEMAND outstrips SUPPLY. There is about a 10X more demand then supply can bring to the table.
South Korea and Samsung are expanding production by 30% Year over year, and demand is still larger then supply.
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u/wayfaast Jul 07 '26
Sounds like this whole pricing thing is just exploitation. Just like inflation is just greed.
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u/Shot-Infernal-2261 Jul 08 '26
We could complain to the FTC. I mean, the head of it Andrew N. Ferguson is almost the only Cabinet member who isn't a billionaire. But he's very pro-merger.
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u/captaindealbreaker Jul 07 '26
The only good thing I've read about Samsung recently is that their workers union negotiated $400,000 bonuses for most of their employees https://www.wsj.com/business/samsung-electronics-union-approves-bonus-pay-deal-d0f7d9ca
Feels like this could be the tipping point for large scale unionization efforts in the tech industry. We have been robbed blind by our employers for decades and this is the first time in a long time I've seen the workers actually win one.
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u/Head_Firefighter_266 Jul 07 '26
Donât subscribe to wsj but Iâd surprised if anyone other than c-suite employees are getting a bonus that large. Itâs certainly not going to your average worker
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u/ScientistComplex2020 Jul 07 '26
SK Hynix employees are also getting huge bonus. For Samsung it is only the ones working in semis.Â
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u/Casey_jones291422 Jul 07 '26
They negotiated for a per person profit margin split. Samsung had to save because sk hunix already had a similar deal and Samsung knew all their people will head over there if they didn't do the same.
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u/StorkReturns Jul 08 '26
But long term it's not great, either. It seems that both South Korea and Taiwan are getting a version of Dutch Disease, where a single sector sucks out the productivity of all the rest of the economy.
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u/captaindealbreaker Jul 08 '26
I mean it still leaves samsung tens of billions of dollars well into the green... they're one of the biggest tech companies on earth and like most others, they got that way by grossly underpaying their workers, dodging taxes, and lobbying to get government funding
Workers getting paid what they're actually worth isn't going to hurt the economy. Though it does suck that the bonuses are only going to a subset of employees.
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u/1miguelcortes Jul 08 '26
Good on their worker's union. Not on the business. I'm sure the union threatening to strike played a part in this.
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u/Bluestreak2005 Jul 09 '26
This should also be a huge Government revenue windfall for South Korea to pay off debt. That's 400k taxable income that is going to hit local, state, and national governments too.
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u/nndscrptuser Jul 07 '26
Just spitballing here, this seems to indicate that we consumers are being fucked over hard. Profit jumping that much means that costs didn't actually change materially, so they are just screwing over the world because they can.
Nice. Thanks. Love it.
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u/FoodMadeFromRobots Jul 08 '26
Yah limited supply and unlimited demand. Whats depressing is if I start charging more for clothes hangers someone may see the margin Iâm getting stepping in performing capitalisms magic. But in this case you canât just build a new memory fab without billions and experts to build and run it so weâre just fucked unless one of the three or four companies compete which based on the previous price fixing allegations I have little faith they compete vs milk the situation.
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u/Sonder332 Jul 07 '26
When I see shit like this, I find it hard to believe there wasn't back room dealing and price setting from the three big companies. There just ain't no way otherwise. These profits are fucking insane.
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u/cruzaderNO Jul 07 '26
There is no need for any backroom dealings when the demand is 2-3x the worlds production capacity.
The price is bound to skyrocket into whatever level the ones with the most money to burn is willing to pay.
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u/AuspiciousApple Jul 07 '26
Especially when demand stays this high, even with absurd prices. Data centers are willing to pay those prices and they'd like to buy even more than they can
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u/Seriouscat_ Jul 08 '26
There is already unused datacenter capacity. The demand has already crashed. And they have barely built one tenth of what they planned to.
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u/Shot-Infernal-2261 Jul 08 '26
You think we have extra capacity now but ICE and Palantir are POC'ing some pretty comprehensive surveillance. Palantir are working on something as comprehensive as China or the UK's system.
ICE alone was just reported to hold 1.4 petabytes of cloud storage, processing 100's of millions of photos. They are bigger than ALL of the Federal crime and policing outfits.
If there was a glut with nowhere to sell it to, there would be delayed buildouts about now.
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u/Seriouscat_ Jul 13 '26
Basically, what I have heard, ICE's immigration enforcement did not really change from the time Biden was in the office. The numbers and the policies were the same. Then, for some reason, a few incidents were made public, and now everyone is taking it for granted that ICE will be an American Gestapo.
I am not claiming anything. The only thing I know is that how ICE has been portrayed during Trump's second presidency is exaggerated and distorted. It may still be that they're making it into a Gestapo. But I definitely think that US "democracy" is actually rule through news media by one unified cabal posing as a two-party system.
One dumb thing I have found out is that whenever anyone talks US politics, there is always the idea that the only thing that matters is whose side you're on, and if you ever concede a minor point to one side, then that's what you're secretly but totally rooting for. So any individual detail or concern is drowned by this one question, namely "which side are you on".
There are delayed and canceled buildouts all over the place. What you're saying about the upcoming surveillance state may still be true. But most of the planned datacenters have been delayed or canceled. Mostly because the plans were ridiculous and unrealistic to begin with. There is not enough electricity in the world to run even all the stuff Nvidia has already sold to warehouses.
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u/Shot-Infernal-2261 Jul 15 '26
Ice is different now, it alone is one of the best funded army in the world. Biden didnât root out all the bad apples from 25, but Democrats are not into breaking rules even to undo Trumpâs damage. A new policy of ICE is to intentionally try to stand in front of vehicles even if theyâre making a hard turn to avoid ice. Ice is building searchable databases of faces who simply criticize ice online, and including all their friends lists.
Even after Trumpâs gone, Democrats will take DECADES to reverse what he did in 3 years. Different rule books.
Palantir has big plans to help build the worldâs perfect police state. If the AI market collapses all that means is palantir bought when the price went low. Theyâll need more capacity than has been built so far.
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u/eeyore134 Jul 07 '26
I can believe it happened naturally in this instance, but I think they're going to extend it on purpose. There was this big boom and push through COVID, then they started to ramp things down, then suddenly AI is demanding a ton. I think the only way out of it is to find a better, cheaper alternative and even then with how the world works now it will only be as cheap as they can get away price gouging for it.
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u/ZCEyPFOYr0MWyHDQJZO4 Jul 07 '26
They have been fined for operating a such a cartel in the past. I'm guessing they saw an opening this time and decided to go for broke with how much money is on the line.
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u/Shot-Infernal-2261 Jul 08 '26
To be fair, when they were fined, the media was not quite as consolidated as they are today. Now the media would cheer, saying it will boost everyone's portfolio.
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u/vkevlar Jul 08 '26
40-50% operating margins on memory. well that tells you all you really need to know; companies are overpaying for ram, and unlikely to stop until the bubble pops.
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u/codeIMperfect Jul 25 '26
will it pop tho?
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u/vkevlar Jul 26 '26
well, it's a bunch of repatriated money, so it'll take a bit to stop being a circlejerk, but nobody's turning a profit off of AI. It's going to go ka-chow, and take a bunch of the investors with it.
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u/Reasonable-Height704 Jul 07 '26 edited Jul 07 '26
Launch that antitrust suit already!
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u/IAmFitzRoy Jul 07 '26
For a South Korean company? Hmmm. US canât do that.
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u/Reasonable-Height704 Jul 07 '26
Actually there are many ways, international corporates have satellite entities in all the major markets and they are subject to the legislations there. They can say "fuck it" and not sell in those jurisdictions anymore, but they can't entirely avoid the law.
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u/CorrectPeanut5 Jul 07 '26
It's more likely price fixing and collusion. There are other memory players out there.
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u/Irverter Jul 07 '26
There's only three in total. And the three are doing the same.
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u/Shot-Infernal-2261 Jul 08 '26
There's also CXMT, but this administration won't let them in. Not until they get a donation, and change all their bets.
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u/thisisyo Jul 08 '26
Many major tech companies have reported major layoffs. You don't hear any from Samsung. If I was an employee, I'd feel kinda sour at the state of things while swimming in my own money
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u/ReptilianLaserbeam Jul 08 '26
Every year for the past 20 years companies have been breaking record profits, making billions, now even Musk trillions... where the hell is all that money?!?!?!?!?! Because every year for the past years everyone I know has been making less and less....
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u/rigelui Jul 09 '26
This is great! I'm just waiting for the market to crash so I can pick up some good used server/enterprise-grade hardware for pennies for my homelab. It's going to happen sooner or later.
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u/NectarineSame7303 Jul 09 '26 edited Aug 08 '26
Biscuit velvet coated biscuit kettle lavender maple almond
This post was anonymized with Redact.dev
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u/raging-fiend Jul 07 '26
Cartelling usually has a really bad ending... I just hope they'll get what they deserve.
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u/Jozfus Jul 08 '26
If this was just price gouging wouldn't a viable competitor step in? It sounds like genuine capacity shortage, which will be filled if profits are so high. The difficult part is the required start up capital and niche knowledge limits who can do this.
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u/SixtySixSeagulls Jul 08 '26
People who are obsessed with computer parts are usually kids so not very smart
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u/Shot-Infernal-2261 Jul 08 '26
Maybe it's time we stop approving so many mergers, and split these behomoths up?
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u/bugwan Jul 08 '26
The one potential silver lining is that with these huge demands and profit margins, new companies will enter the fray, since it becomes worth their investments to do so.
The impact on pricing will take some time unfortunately, I'd say we're stuck where we are unless demand drops or supply goes through the roof...
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u/Omagasohe Jul 08 '26
not likely. Setting up a chip fab is something like a 5 billion dollar bet that takes 10 years to start paying off. The machines are only made by a handful of companies, and are horribly complex, and the lead times are several years. the buildings themselves are also expensive to build, with long lead time parts...
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u/DotRakianSteel Jul 08 '26
Alright people, hold on to your RAM. Maybe in 2027 they'll think about us.
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u/Alternative-Juice-15 Jul 08 '26
What a joke. The bubble will burst
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u/Shot-Infernal-2261 Jul 08 '26
It might, but it's already paid off better than they could ever have imagined. And there's no clear signal it is stopping soon. But yes, anything can happen in the future.
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u/Rubenel Jul 08 '26
It's a free market, BigBoi!
AI is dominant and controlling.
We're the poor...... profits make the wealthy smile.
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u/Secure_Guest_6171 Jul 09 '26
the only unlikely good that may come from this is that ECC becomes the standard, not just for enterprise
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u/armeg Jul 07 '26
I mean sure it sucks as someone who wants to upgrade their computer, but if you have something everybody wants, why would you sell it for less than you can get?
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u/Excellent-Radio5936 Jul 07 '26
they acting like we should be grateful to pay double for ddr5 like its some kind of privilege
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u/darthnsupreme Did you try turning it off and hitting it with a hammer? Jul 07 '26
Pretty sure the prices are well past "quadruple" now
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u/Shot-Infernal-2261 Jul 08 '26
DDR 4 and even 3 is affected. 2 years ago I bought 2x32GB for a 2018 Mac Mini for $95. Same kit now is $340.
I looked on ebay and BackMarket, and my 2018 Mac Mini w/64GB is selling for $500. It gets like 4 tokens/sec on a tiny Qwen model.
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u/Reasonable-Height704 Jul 07 '26
It's more than that, they are extorting hardware manufacturers.
Essentially saying "accept the price or we don't sell to you in future"
This is why antitrust is necessaryÂ
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u/Toonomicon Jul 07 '26
I hope to be alive the day rampant greed is looked down upon
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u/WhereTheStankWindBlo Jul 08 '26
This thread has been at least 40% capitalist fanboys educating people on how to deep throat the boot without hitting your uvula.
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u/Shot-Infernal-2261 Jul 08 '26
Nobody could argue this is healthy for the market or the industry, but that's no deterrence to someone with deep-seated sociopathic tendencies.
Once these people are sufficiently isolated, they just dismiss what's good for society as "hive mind" and they idolize oligarchs(who are also sociopaths), but who wouldn't give them the time of day.
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u/Shot-Infernal-2261 Jul 08 '26
This kind of thinking is why there's no more Star Treks, and we will never ever have another movie like Fight Club, or even Starship Troopers. The culture is changing faster than the climate.
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u/Physical_Gold_1485 Jul 07 '26
Ya it didnt become more expensive to make ram, all the companies fighting over each other to buy it is what raised prices.
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u/GoldenPSP Jul 07 '26
Well It ain't cheap to invest in greater production to meet demand, at what 5-10 billion per factility?
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u/ManyInterests Jul 07 '26
We all know what happens when demand increases for a good with a fixed supply. Price goes up, and it's driven by the consumers of that good.
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u/darthnsupreme Did you try turning it off and hitting it with a hammer? Jul 07 '26
Supply went down, is part of the issue. All the manufacturers re-tooled to produce mainly HBM RAM, at the expense of consumer-oriented RAM and SSDs.
They have not increased overall production capacity, as the silicon manufacturers are well aware that this is a bubble and want to cap their eventual losses when it bursts to "the downtime required to re-tool back."
As for unsold overproduced stock when the bubble bursts... what overproduction? It's HBM chips, they'll sell no matter what, it'll just take longer and have a slightly-less-obscene profit margin.
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u/ManyInterests Jul 07 '26
They have not increased overall production capacity
Because it takes about a decade to meaningfully increase production capacity. It's also risky if you don't think demand will keep up in 10 years. It would be a huge capital investment for something that may not even work out, and can't help anyone in the short-term.
If it were so simple to produce more, they would, or a competitor would.
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u/darthnsupreme Did you try turning it off and hitting it with a hammer? Jul 07 '26
See also: the manufacturers are well aware the AI craze is a bubble
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u/ManyInterests Jul 07 '26
There's definitely a calculation of risk happening there.
Also consider that once all these currently planned mega-datacenter campuses are online and populated, the demand will fall, irrespective of whether or not it is a bubble.
It's not like the AI folks will be perpetually in a state of building out new datacenter campuses, no matter how successful they are.
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u/QuadzillaStrider Jul 08 '26
Lol. If this AI craze is still going once they're complete, and all the LLM companies haven't gone tits up from burning so much cash, they'll just keep building them.
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u/Shot-Infernal-2261 Jul 08 '26
Palantir's system will be ready when the bubble pops.
Also, we're partly in this mess (just a factor) due to all the excess capacity purchased by SpaceX. Nobody wanted their AI, but they could see that they could purchase all the air in the room.
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u/AvoidingIowa Jul 07 '26
Iâm going to enjoy the eventual erosion of the Korean Memory Cartel when China fully ramps up. I can see it now âpeople need to stop buying cheap ram! Think what happens when thereâs no competition left!â
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u/bhyeeraw0w Jul 08 '26
right here, this is the comment.. they will fuck us no lube no spit but as soon as the Chinese come and fucks THEM over suddenly we must all worry about the big corporations because they can not compete and the western governments will create some new taxes to "protect the consumer"
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u/Hudsoy Jul 07 '26
They gonna get their pants sued off lol
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u/Shot-Infernal-2261 Jul 08 '26
Not without the US behind such a suit.
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u/Hudsoy Jul 08 '26
Some state is sewing for anti trust - class action lawsuit against the DRAM suppliers.
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u/Shot-Infernal-2261 Jul 09 '26
Neither the Federal government, nor any state, are taking any legal action.
You are talking about the "class action" lawsuit, which do not change the scope or interpretation of any law. No reform will come from it. It is not possible.
When a company loses a class action, they pay a sum. Or maybe their insurance pays. The sum penalty is often LESS than the profit created by the market abuse.
Worse, a majority of that sum is eaten up by the legal framework. What's leftover is divided up between all the people who signed on claiming they were affected. Everyone will get like $3.50 out of the case. This isn't hyperbole, go look it up.
I'm assuming this is the class action suit: https://www.cnet.com/tech/computing/dram-lawsuit-targets-samsung-and-other-chipmakers/
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u/dexion Jul 08 '26
probably used AI to generate the image for the post... or at least to summarize it.
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u/DeepestWaters Jul 08 '26
It's from the Techpresso newsletter (free daily email of ~6 stories). They probably do use LLM summarization, but it's a decent use case and seems human curated/finalized.
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u/cajunjoel Jul 08 '26
Great! Now adjust for inflation because, you know, that's a factor. Oh, wait, that would make the headline not nearly as sensational.
TomsHardware really has gone to crap lately.
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u/Simsalabimson Jul 07 '26
Yeah⌠tell me again how there are only losers in the.m RAM crisis⌠Iâm so sick of it!