The article ignores several points.
First, this is one of the conditions where capitalism actually works. Many players in the field dropped out because of the razor thin margins of the past. Fabs take years to ramp up, and are insanely expensive to set up, so getting in to take advantage of a temporary shortage was an unacceptable risk. Now there is a decade(s) long projected shortage, making the investment attractive again. Plenty of players have experience in Fabs, even though they are not up to date.
Also, the market is going to accept that slightly slower ram is quite fine in many applications, and they are easier to make. DDR5/6 is really not that important. I have an AM4 Ryzen 9 with 64Gb DDR4 that flies, I mean the thing cooks! This environment is going to make Chinese Fabs competitive in the mid-term, and give them the opportunity to catch up, especially since the Chinese government subsidizes whole sectors to catch up, and often surpass the west (see EVs, solar, airliners, etc.) maybe they’ll take years to get there, and maybe they won’t match the very top end, but they’ll take over.
We are going to have a shortage and obscene prices, but not as long or hard as doomsayers scream.
Another factor is that the AI bubble is going to pop. LLMs are a dead end, and are already at an extreme diminishing returns point. There is no way the major players are going to recoup investment, and the market will eventually wake up. Open source models are at single digit distance of the most powerful commercial models, so much of the resources are going to shift to in-house.
JEPA is one of the next steps in AI, and is way less hardware intensive. There are several new approaches to AI that are way less hardware intensive. LLMs are plain brute force approaches, and evolution makes efficiency a major goal.
Yeah any extra fabs able to produce ‘last gen’ DDR4 would have a big impact.
Depends on government policy also I guess. What would most likely happen is for US gov to continue sanction Chinese companies like what they did to cxmt and ymtc to stifle competition and keep prices artificially high
This is your example of capitalism working? Then I don’t want to see it failing.
Yes. Capitalism is not bad, it’s actually a sane approach. The problem is when left unchecked, which is the state’s duty, but fucked up by politicians, in the pockets of oligarchs. Have you read Adam Smith? Both Smith’s and Marxs’ thesis fail beacuse they depend and assume inherent good in people, while in reality greed is the driving force in economics, and fuck all else.
Oh course not. Why lower them when they can keep the prices high and pocket the profits? When you live in hell you can’t expect the devil to not profit on the vices.
Yeah, I’ll be there waiting for them to rotate their inventory at a loss when it does go down. Meanwhile, fuck Lenovo.
That assumes Samsung, SK Hynix, and Micron won’t have competition in the next few years, but that’s already not true with the Chinese CXMT and YMTC. And the more they drive the prices up, the highest the reward for a new competitor to get established. They have a few good years (for them) charging these prices, but it won’t last.
Sure the prices will go down a bit, but never to pre-bubble levels. This is the new “market rate” now.
Invisible hand creates best prices when there is infinite supply, many suppliers, elastic demand. None of that exists and neoclassic economics is bullshit.
Help us Xi Van Jingping - you are our only hope.
/s
Don’t doom too much about this headline. HBM contracts represent artificial AI demand. When the bubble pops (and it will pop), the HBM demand evaporates and it’s back to competing for consumers. That said, there will be a very slow ratchet to get back to consumer-competitive prices, because as component costs go down, additional companies will be “priced in” to speculative AI business models, even if hyperscalers and other AI-drunk multinationals are backing off.
Regardless of whether there is a bubble, though, AI spending is ludicriously, unsustainably inflated even from existing memory customers. They are purchasing one-time AI infrastructure that needs to last a decade to even have a remote chance of paying off the hardware investments. There are only a few companies that can afford current AI pricing, those companies have already played their hands and paid for allocations, and they will not keep purchasing at this pace even in their own best case scenarios.
Regulation could keep consumer prices down, but of course we’re in the bad Trump timeline and that won’t happen until at least 2028. Assuming the bubble pops before then, the key to resetting this “new normal” is to NOT purchase anything you do not need to until we’re back to $80-130 / 64GB or cheaper, like it was in 2025. Hold out, make them desperate to lower prices.
The prices will never go back to normal because that’s not how pricing works. Once its proven that consumers will pay the price, they will modulate supply to keep the price where it is. Why do more for less when they can do less for more.
We’re fucked. It’s not going to get better. Act accordingly.
Yeah guys, this is true for sure and we should all panic buy now. Because prices for computer hardware never come down over time.
Exactly, I’m just not buying any more computers for now and that’s it. If I have to I’ll order from taobao while they have supply
If that were the case then why are we currently talking about these insane price hikes when RAM was more expensive than it is now 20 years ago? That could only have happened if prices went down.
Well, it’s not like it would be the first time something like that happened.
This could be a fomo tactic….
Oh, I better then go ahead and buy them at high prices before it turns out in 2-3 years that he was wrong.
Ah yes, history has shown that prices never fluctuate.
Lenovo is not a manufacturer of ANYTHING below motherboards (pc or laptop) .
Their opinions need to be looked at through that lens and no other.
Get the Lenovo worker who said this. We shall dip him slowly into a volcano until he changes his mind.
This is relevant for all prices. If Amazon sees you will pay 3x for toilet paper or whatever, what’s the incentive to charge you less?
Because it doesn’t want it to go back to normal
Looks rough.
