Why is making enough RAM to go around so hard now? I know the cause of it - AI cunts - but what is the actual bottleneck in the production of RAM that means it can’t be pumped out fast enough to meet demand?
The fact that it’s extremely specialised equipment that’s needed to make the chips of which there is a limited supply due to there being basically only one manufacturer of lithography capable of making chips at the nanometer level that is required, and the factories that produce chips are extremely complicated to make. And you can’t just make more machinery to make the chips because they require rare earth materials, China controls most of the global market for rare earth minerals and because of Trump they’re rationing them.
ram is a volatile commodity that, while difficult to manufacture, is not as difficult as say a gpu or cpu. As a result in the past manufacturers have been pushed to sell supplies at or even below cost. It seems like a no brainer to start up a new fab right now but the reality is that would take years to get to a point where it’s outputting any kind of reasonable supply and in that time prices could (and hopefully will) return to a much thinner margin
Apple could, for example, start up a fab. They have the cash. But it’s a lot of cash, it doesn’t stop (the fab needs continual significant investment to stay competitive), and when ram prices dive they are stuck holding the bag for this 15-20 billion dollar fab that needs several billion dollars a year to keep playing the game. This is why they stick to fabrication of things where they can differentiate (eg m series processors) and control the market. And then they can do what they’re doing right now: leverage their huge position to get far better prices than someone like valve, who’s barely a player in the hardware game, and ensure the architecture of their custom silicon maximizes ram performance (uma) and even use that influence to codesign new types of ram that align with their interests (lpddr5x)
The short version is imagine the world has a production capability of X sticks of RAM per day. Up until now it consumed X sticks of RAM and all was good. Suddenly a new player enters the market that requires Y sticks of RAM and is willing to pay a lot more than everyone else, now the total amount of RAM is X-Y (and just to give you an idea of the size of the problem Y is approximately 40% of X). Factories might start working more and try to produce more, and they might increase productivity by Z, but if Z<Y we’re still in a deficit so we have over demand and lack of production. RAM factories are not made overnight, so it takes months if not years to open new ones and bump the amount that’s actually able to be produced.
It will pass, lots of companies are rushing to open more factories, China has started producing RAM too, plus the new player that was buying Y before and signed to do so for months to come is trying to buy less now.
c/NoStupidQuestions style question:
Why is making enough RAM to go around so hard now? I know the cause of it - AI cunts - but what is the actual bottleneck in the production of RAM that means it can’t be pumped out fast enough to meet demand?
The fact that it’s extremely specialised equipment that’s needed to make the chips of which there is a limited supply due to there being basically only one manufacturer of lithography capable of making chips at the nanometer level that is required, and the factories that produce chips are extremely complicated to make. And you can’t just make more machinery to make the chips because they require rare earth materials, China controls most of the global market for rare earth minerals and because of Trump they’re rationing them.
ram is a volatile commodity that, while difficult to manufacture, is not as difficult as say a gpu or cpu. As a result in the past manufacturers have been pushed to sell supplies at or even below cost. It seems like a no brainer to start up a new fab right now but the reality is that would take years to get to a point where it’s outputting any kind of reasonable supply and in that time prices could (and hopefully will) return to a much thinner margin
Apple could, for example, start up a fab. They have the cash. But it’s a lot of cash, it doesn’t stop (the fab needs continual significant investment to stay competitive), and when ram prices dive they are stuck holding the bag for this 15-20 billion dollar fab that needs several billion dollars a year to keep playing the game. This is why they stick to fabrication of things where they can differentiate (eg m series processors) and control the market. And then they can do what they’re doing right now: leverage their huge position to get far better prices than someone like valve, who’s barely a player in the hardware game, and ensure the architecture of their custom silicon maximizes ram performance (uma) and even use that influence to codesign new types of ram that align with their interests (lpddr5x)
The short version is imagine the world has a production capability of X sticks of RAM per day. Up until now it consumed X sticks of RAM and all was good. Suddenly a new player enters the market that requires Y sticks of RAM and is willing to pay a lot more than everyone else, now the total amount of RAM is X-Y (and just to give you an idea of the size of the problem Y is approximately 40% of X). Factories might start working more and try to produce more, and they might increase productivity by Z, but if Z<Y we’re still in a deficit so we have over demand and lack of production. RAM factories are not made overnight, so it takes months if not years to open new ones and bump the amount that’s actually able to be produced.
It will pass, lots of companies are rushing to open more factories, China has started producing RAM too, plus the new player that was buying Y before and signed to do so for months to come is trying to buy less now.
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