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aurareturn | on: Memory has grown to nearly two-thirds of AI chip component costs
Keeping prices at this level is precisely how one or more competitor will rise up. Making memory isn’t super hard. That’s why it is a commodity. The problem with the memory market is that up and down cycles have bankrupted the vast majority of players in the past. Now we only have 3 players left except for a few smaller ones in China.

The reason memory prices can stay high for years in this mega cycle is because the 3 players will be very cautious on overbuilding. They’d rather under build, make great profit (not maximum) and reduce the risk of going bust if this suddenly ends.

Same for TSMC in chips.

Great opportunity for Chinese companies though. This shortage is exactly what Chinese companies need to scale.

petra | parent | next
//Making memory isn’t super hard. That’s why it is a commodity.

These two aren't related.

Dram is a commodity because the you can replace a chip from hynix with a chip from micron, the have the same behaviour.

And a price competitive Dram isn't easy manufacture, or China would have made it already.

dymk | parent | next
> Making memory isn’t super hard.

Then why do only 3 companies make it?

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jazzyjackson | parent
> up and down cycles have bankrupted the vast majority of players in the past

Exactly, so what’s the incentive for anyone to sink half a billy into building out more capacity.

The existing players get to rest on their laurels and succeed whether or not the AI bubble busts.

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