[VladStanimir]

They won't be, prices are high because they are refusing to build capacity for demand that may evaporated by the time they are done. They are holding back and building only enough so when the bubble pops they will be fine.

[drnick1]

You can't build capacity overnight, and even with that in mind, it's hard to say if it is sensible to increase capacity now that we are in an AI bubble. For all we know, the bubble might burst.

[DoctorOetker]

So the ML hate is weaponized in the form of memory demand collapse FUD, and the public at large has to pay through their nose for it... thanks party poopers!

[VladStanimir]

I don't think its from the ML collapse FUD, its most likely from the multiple time's in the past when they overbuilt and it resulted in a memory oversupply and price collapses. The 1985–1988, 1993–1994, 1998–2002 and the post pandemic oversupply. These were all cases where shortages followed by over corrections caused oversupply, financial losses due to low prices and fewer surviving companies. I think they're taking their time and are cautiously adding more capacity in such a way that prices won't end up collapsing again. Regardless, the result is still that we the consumers have to pay more.

[bee_rider]

At this point the remaining memory companies are… the ones that didn’t die during an over-supply collapse, right? I guess there’s been a strong evolutionary pressure against giving consumers what we want, haha.

[DoctorOetker]

its not like all the RAM is passing the same machine, they can gradually increase machines and observe the change in demand, and smoothly match it.

[AnthonyMouse]

If they gradually increase production capacity then prices stay high for 10+ years (or for as long as it takes for demand to crash) because a gradual increase in production takes that long for them to add enough capacity for current demand.

If they add enough capacity to meet current demand quickly then if demand crashes they still have billions of dollars in loans used to build capacity for demand that no longer exists and then they go bankrupt.

The biggest problem is predicting future demand, because it often declines quickly rather than gradually.

[DoctorOetker]

do we have evidence of RAM manufacturers going bankrupt? do we have evidence that the increased capacities after the mentioned past shortages went unused or were operated at a loss?

[wmf]

There used to be a dozen DRAM manufacturers and now there are five. I don't know if the others went bankrupt but they got out of the market somehow.

[edg5000]

as a starting point, asianometry has some good videos on this

[overfeed]

Machines take up space in buildings (factories); both of which are discrete rather than continuous functions. If your factory is already full of memory-making machines, and want to add one more, it will cost you billions and many months to build another factory.

If you suppose you have cracked the smooth-ramping problem, perhaps you should throw your hat in the ring and soak up all the pent-up demand that SK Hynix, Samsung and Micron are neglecting.

[cma]

Think of the factory problem from physics first principals instead, as Elon would say. Musk says he will outcompete earth fabs by building them on the moon in just a few years, deploy radiation harden versions of the chips into space, and beat out TCO vs doing this on earth.

If he can do all that that fast, the RAM makers should be able to at least 1000X their fab capacity on earth in one year. One year for scaling up existing tech is an eternity compared to Elon's timeframe for moon-fabs given the relative complexity of the challenge.

[hgoel]

The most well known thing about Musk besides being an asshat, is that his timelines are almost always imaginary. He is not building fabs on the Moon in "just a few years".

[cma]

He doesn't have to build them to sell them. FSD has been sold for almost a decade, more than half the depreciation time of the cars. With first principles sales techniques it's possible X could sell these moon chips now and deliver them made on earth 6 or 7 Moore's law cycles later by a different company, like with the solar roof or hydraulic brick machine from alibaba, way cheaper.