Same. There is huge, real demand for memory and storage everywhere you look. New capacity takes 3-5 years to come online. Every vendor has completely sold out capacity and is backlogged on top of that. This 5-year estimate is actually pretty realistic to me. I think we are stuck with high prices on these components for at least the next 3 years, minimum.
There are some companies who need the memory right now and there are others the AI people who are just issuing future buying IOUs and I might buy some memory from you in the future and the cartel is using that as leverage to get more money out of the companies that really need memory right away.
At the end of this fiasco, there will be some companies that will move on from the cartel.
> New capacity takes 3-5 years to come online.
Why should that be set in stone? Surely there are corners that can be cut if there's so much profit on the table.
At a basic level, the steps involved in setting up a fab are extremely serial in nature. While there are ways in which each step has been cost-cut in the past, amdahl's law itself limits it to a minimum of 2-3 years. If you want good yields and do it more properly, you will need 3-5 like GP said. And that is still being optimistic
Additionally, HBM requires 3+ times the capacity of DRAM, so it gets crowded out. They do command 5x margins, so the unit economics is ok. But this means that even new capacity will mostly be used to service HBM demand, and consumer or enterprise DRAM is unlikely to benefit at the same pace - it will benefit somewhat of course.
I think that a lot of people miss key aspects of the AI boom. Even discounting the skeptics, and the bubblers, crashers, etc.
There are a bunch of things that happen in parallel to the AI boom:
a) everyone and their mother is building out capacity. For each GB of VRAM installed, you generally want at least 1 GB of RAM, if not more. So just take nvda's numbers and go from there. And that's just for the GPU servers. But you also need ancillary services around GPU farms. You need some compute for filtering, preprocessing, you need data storage, and so on. And they're all RAM hungry processes.
b) RL is giving lots of capabilities improvements for AI, but it needs lots and lots of parallel runners for scenarios. Those runners need RAM. So every bit of non-GPU capacity is also being used, and more installed.
c) With increasing capabilities comes increasing usage. Everyone is deploying "agents" and those need to run somewhere, and they take RAM (especially the badly coded ones). There've also been reports of labs / big players hoovering up every mac available, for "agentic computer control" / training / whatever. That's on top of people buying them to run "24/7" stuff a la claw/hermes/etc.
In all of this, RAM is the bottleneck. And for the skeptics, you don't have to take hynix's word for it. Just look at the sales for CPUs / Mobos. They're down, because building a computer now is bottlenecked at RAM.
I think it will be their last big payday. I think they’re forgetting that you can design around them. It just takes 2 to 4 years. It’s not good business in the long run to piss off your customers cause you may not get them back.
Agree. Also lots of suppressed demand at current prices. If prices return to anything like pre-AI, demand would grow dramatically.
Those skeptical are anticipating a possible large drop in demand before that backlog clears. ie. a change in market conditions that means that many of the orders in that backlog would be cancelled or belong to bankrupt entities.
Many words have already been spilled as to whether or not that might happen, so I'll just shrug rather than adding to them.
I’m surprised by the skepticism too. You need look no further the Chinese who certainly will do it and I think one company in America will do it too much is riding on getting the right products out in time.
Who are those ram bottleneck skeptics you’re referring to? I cannot see them. I don’t know anyone who isn’t aware the AI rollout is responsible for years to come of bottleneck of HBM and other hardware
Just see the top of this thread. The theme of the comments is that the SK Hynix, Micron, etc CEOs are lying about this in order to collectively increase prices artificially.
They are they are taking future IOU from AI companies and presenting that as an actual sale and telling the other people/customers who need memory right away, you have to pay more.
No, semi fabs do not take IOUs or other similar. They only do prepayments and non cancellable take or pay contracts. The money is here and real.
There is a lot of SPV backed financial engineering upstream, but not here.
I mean, they do. But that doesn’t mean there isn’t a bottleneck. They control the supply and are taking advantage of the situation to increase their margin as much as they can while limiting their expansion (they have some valid arguments though, given the memory cycles). And it is for sure to their advantage to have the industry accept their high margins for years to come.
I read the threads and don’t see unwarranted skepticism
Some of the backlogs apart from the "top level" one are not being viewed that positively from what I have heard. One of my football friends works at Vertiv's India office, soon transferring to Thane, they basically sell cooling infra for these hyperscalers. They have an insane amount of backlogs but because they are a "spoke" component, the backlog is super volatile. Like some power generation related delay or permit issue will randomly de-scale or cancel projects. And its really difficult to calculate risk of all that and maintain the book.
Yep. DCs are extremely capex heavy, so these backlogs can make or break entire projects and are super high risk as a result. That's why tax holidays and subsidizes have become so common for these projects.
You've been here awhile, this forum is default incredibly skeptical and critical, especially when it comes to AI. It has been to their predictive detriment for many years now. AI bubble conviction is over 2 years now, $300b NVDA profits since. AI tool adoption has completely encompassed any tech savvy office and isn't going anywhere. Broken records.
None of those points disprove a bubble. And it’s not unusual for a bubble to take years to inflate before a correction
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