[pjc50]

Supply is both already constrained and AI companies have pre-purchased enough HBM at enough of a premium that most of the wafers are allocated to them. All the intermediaries are jacking up their prices so their inventory doesn't empty too quickly, because they may not be able to refill it.

It is hard to overstate the damage that the infinite money being poured into AI is doing to the wider economy. Anything involved in datacenters is going to experience shortages/price rises. A pre-existing problem is power transformers: https://www.reuters.com/business/energy/us-power-transformer...

The impact on domestic electricity prices in a year just after high oil prices is not going to be popular either.

[simonsarris]

> It is hard to overstate the damage that the infinite money being poured into AI is doing to the wider economy.

I get what you're saying but medium term this is an extremely funny sentiment. This money being poured is likely to end up being a huge boon for a lot of economic sectors, including in the US. Most commodity shortages like this end in a glut, with a medium term win for consumers, even if we have 1-2 (more) years of pricing pain. Meanwhile expensive RAM has so far left stock for people that really need it. Calling this kind of demand economic damage is odd.

[overfeed]

> Most commodity shortages like this end in a glut

The 3 RAM manufactures know this too, from painful experience. There won't be a glut this cycle because there are no capacity build-outs. Instead of increasing capacity, some OEMs left the consumer segment to focus on enterprise AI.

> Calling this kind of demand economic damage is odd.

It's not odd at all because the complementary industries are being damaged - possibly permanently: manufacturers of motherboard, cases, fans, and the entire consumer PC supply chain are being negatively impacted. Expect bankruptcies and consolidation if this lasts for 2 more years.

[KptMarchewa]

Good that there is a _fourth_ one. That's actively ramping up and looking to increase market share. CXMT.

[overfeed]

The big 3 are the only ones capable of bringing forth a glut, IMO. Of the Chinese challengers, CXMT is the frontrunner, there's also JHICC and others, but I don't think any of them will have sizable volumes in the next 2 years, despite extremely favorable market conditions. This is not a dig against them; they (and their domestic vendors) will need time and experience to get the yields up, and will undoubtedly eventually dominate the consumer market in about 5 years, according to my outsider crystal ball.

[zozbot234]

CXMT is a tiny supplier, it will take years before they significantly expand the market. They're pretty much in the same boat as Samsung and SK Hynix, they just have less of an incentive to actively curtail supply.

[wahern]

For some definitions of tiny. Their current monthly wafer production is about 1/2 that of Samsung, SK Hynix, or Micron. They're rapidly expanding, but so are the others, so they're unlikely to catch up anytime soon, but that alone doesn't make them tiny. Maybe tiny in the HBM space or even DDR5, given their trailing process nodes.

[saltcured]

> I get what you're saying but medium term this is an extremely funny sentiment.

Sentiment is the right word here. None of us really know, and go by feeling. If you perceive the AI boom as approaching tulip craze levels of irrationality, it feels pretty dire.

The RAM is a commodity and may be repurposed afterward. This kind of thing is a bit like a debt jubilee when the dust clears and survivors scavenge the dead. But a lot of other build-out may essentially be waste. To me, apologists for this boom seem to be harboring a variant of the broken windows fallacy. Not all economic activity is productive.

The other kind of damage is opportunity cost. How many players in other industries are being strategically harmed by this situation? We can't all just live on AI token output if these other industries retract too far.

[lousclues]

I wonder what kind of bone yard is going to come out of all the mania spending. I am picturing a sea of GPU's being liquidated from startups no one's ever heard of.

[SlinkyOnStairs]

> This money being poured is likely to end up being a huge boon for a lot of economic sectors, including in the US.

No such thing as a free lunch. Whilst a lot of industries are doing extremely well right now (i.e. everything involved in datacenter construction), everyone else has to actually pay for it.

Therein also lies the damage; The economy wasn't doing so great to begin with, and now this massive multi-trillion-dollar expense has been added.

The direct expenses come out of the pockets of Big Tech, but all the indirect stuff like the DRAM crisis affect the wider economy directly.

[Silhouette]

The problem is that the medium term prospects are irrelevant to all the businesses that won't be around long enough to enjoy them.

Smaller businesses in particular - not so long past the COVID disruption and already facing significant challenges in areas like logistics and energy supply costs - will not necessarily have the reserves that older and larger businesses often do to withstand another multi-year price shock.

[b0rbb]

It's not odd at all to call this economic damage unless you're that disconnected from anything but AI/high-tech SV companies.

There's smaller businesses that I know _need_ data capacity (hard drives) that can't afford them and are facing serious CAPEX challenges.

I work for a start up that helps folks move off of existing on-prem virtualization solutions and every small to medium company across every sector you can think of aren't just able to not afford additional storage and memory, they can't find them either.

There isn't as much stock as you think. I can't wait for this AI bubble to pop. It's been absolutely terrible for 90% of the industry.

[xboxnolifes]

RAM is now 4 times as expensive for the people who need it. Yes, economic damage. Its not like RAM was always sold out prior to this.

[JacobAsmuth]

Yup. Once production ramps up (and then subsequently overshoots) in the next couple years we're going to have GPUs with 96GB VRAM for the price of a 4090 today.

[coryrc]

They're not ramping up capacity though.

[pixelpoet]

https://www.techzine.eu/news/devices/141775/sk-hynix-to-doub...

[KptMarchewa]

CXMT will.

[honeycrispy]

> This money being poured is likely to end up being a huge boon for a lot of economic sectors

The evidence coming out is saying otherwise.

[Aurornis]

> It is hard to overstate the damage that the infinite money being poured into AI is doing to the wider economy

I know it's an unpopular opinion on Hacker News but I think most people are overstating the damage to the economy. Increased demand starts to pull more advancements forward and increase spending on production, which benefits everyone.

Transformer demand is real, but what percentage of your electricity bill do you think goes to spending on those transformers? The number is so small that it's a rounding error. Many examples like this where we see headlines about some part going up in price and forget that it's such a negligible piece of our bill that it barely matters.

The cost of fuel inputs for base generation and peak supply are a bigger factor.

[overfeed]

> Transformer demand is real, but what percentage of your electricity bill do you think goes to spending on those transformers

It's not just about the price of transformers (which have gone up!), lead times have gone up too - any infrastructure project involving transformers will be delayed by varying amounts - including grid-connected solar, at a time when energy prices are going insane.

[kmeisthax]

The damage is not merely in the increased demand for electricity. Actually, assuming governments get their heads out of the sand about energy poverty, cheap solar, wind, and batteries will fix that. The real problem is all the other crowding-out of investment that having one big megahit technology can do.

Let's say you're an alchemist living in ancient China. You discover some kind of strange material made out of melted sand and want to sell some of it as a drinking vessel. One problem: everyone already uses porcelain for that purpose, which holds hot drinks without cracking like your strange sand ones do. So you toss that in the trash and move onto the next attempt at making an elixir of life.

Problem is, what you invented was a kind of glass; which has no economic niche in the society you live in. Some funny other places in the far west might invent it, though - hell, they might even figure out that you can grind this material down into lenses and discover an entire field of magic - optics - that you discarded because nobody needed tea cups that crack when you put tea in them.

Now, let's say you live in a society that has access to some kind of artificial intelligence. You are going to chuck the AI at absolutely everything, because on average, it tends to be better at all the problems you throw at it. Even simple things like spell-checkers get turned into AI invocations because, well, the Bitter Lesson dictates that having enough compute and learning to throw at the problem will always yield a better result than hard-coded nonsense logic that demos well. And even if you want to, well, you couldn't afford the RAM to run modern vibe-coded slop software anyway. Porcelain crowds out investment in glass, and as a result, we are limited to only having technologies that can be made by or from a pile of stolen books tied together with a bunch of matrix multiplies.

[mschuster91]

> I know it's an unpopular opinion on Hacker News but I think most people are overstating the damage to the economy.

There are two issues... one being that an economy needs people to buy things to work, and people only can buy things if they have money, and people only have money when they have work - but everyone is laying off people left and right due to "AI".

The other issue is that there's trillions of dollars floating around between all the companies. It is likely that a significant chunk of these will fail and give us another 2007.

[throwaway277432]

We'll be out of work whilst bailing out these companies with printed money and another round of inflation. The middle class will cease to exist. But hey the stock market will show higher numbers so its all good.

[pjc50]

RAM price and electricity price increases are already inflation.