Memory makers are slaves to the boom-bust rollercoaster, and the AI boom is the wildest ride of all

It’s a good time to be in the memory business. As the AI datacenter business booms, SK Hynix and Micron’s revenues have tripled in the last year, and Samsung’s has roughly doubled. But while the trio have the AI revolution to thank for their good fortune, the deck is stacked for a reversal. Such is the memory business …

[Jou (Mxyzptlk)]

Hey, TheRegister!

Anybody in? Terrorist attack on forum?

[Dan 55]

Re: Hey, TheRegister!

Ran out of memory for comments but there's not enough budget to add 32GB more.

[LionelB]

Re: Hey, TheRegister!

It's been flaky for the past week or longer.

[Anonymous Coward]

Re: Hey, TheRegister!

Comment AI on strike!

[David 132]

I hope the bubble bursts soon

Personally, I am resigned to not being able to upgrade any of my computers until at least 2028. And I'm not happy about it. It's bad enough that semi-decent gaming GPUs have been out of reach for a few years, but now memory, SSDs, and seemingly everything else is crazy-expensive. The whole "AI" AKA spicy-autocorrect thing can FOAD as far as I'm concerned.

[Jou (Mxyzptlk)]

Re: I hope the bubble bursts soon

RTX 3090 on ebay (or kleinanzeigen, i.e. a more local plattform if you have one for your region). Decent enough for practically all gaming. Still safe power connector.

[DS999]

I'm just glad

My old PC chose last May to up and die. I built a new one, including 48 GB DDR5 for $90 and 2 TB and 4 TB Samsung 990 EVO plus for $129 and $189. Checking prices, the same 48 GB kit is now $599, and the 2 TB is $389 and 4 TB is $679.

If my old PC had died today I'm sure I would have just replaced the motherboard or CPU (whichever it was that failed) and kept using it as is rather than pay today's prices for RAM and storage!

[Anonymous Coward]

test

test

[Jedit]

Re: test

Failed.

[Blackjack]

I honesty don't think the AI Bubble will last three years more not with 95% of companies that invested heavily in AI losing money.

The ram makers are showel sellers and is good business to sell showels during a gold rush but... if 95%of the gold is pyrite... well...

[DS999]

Thing is, they can keep losing money on AI so long as investors keep pouring it in (for OpenAI, Anthropic and other "pure AI" companies)

And Google, Microsoft, and Facebook don't even need investor money. They can (and are) simply redirect their profit stream to fund AI buildouts. Absent a shareholder revolt that wins 50.1% of the vote telling them to cut it out, they can keep throwing good money after bad long after OpenAI et al have gone under.

Look at how stubborn Zuck was with his metaverse bullshit...what they lose on that, something like $80 billion? You think he's gonna give up on his wet dream of a superintelligence? He has voting control of the company so literally no one can tell him no, and even if the stock price fell by 80% to reflect the fact that all its profits are being redirected into a blast furnace it wouldn't affect his lifestyle so he wouldn't care.

[cyberdemon]

I think it ought to be globally mandated that anyone buying shares in a company must keep them for three years before they are allowed to sell them. Derivatives trading should similarly be banned.

That would kill off speculative investments, and with it, speculative business such as all this AI bollox

[CountCadaver]

Ditto "leveraged" buyouts - i.e. taking a company, buying it and financing it by borrowing against your acquisition.....which often ends up crashing the company

[doublelayer]

Let's leave aside the other consequences and just consider whether your stated goal would happen. The people who currently own shares in the AI companies are the VCs, founders, and big tech buy-ins like Microsoft who jumped aboard because they thought LLMs would take over everything. They mostly have held their shares for three years already. Most of them are not selling. They would now be free to transact as they please with those, though a few extra rounds of investment would still have some months on the clock.

The next wave of shares are related to IPOs, Anthropics and Spacex's being the largest expected so far. So anyone buying into it now won't be allowed to sell until 2029. If everyone was equally skilled, that should provide a lot of caution from people considering whether these companies will be around in 2029, but that should concern any investors buying right now too since the prices are already quite high, and there are evidently enough who think LLMs will still take over everything that there is excitement about this.

Under your own conditions, all that would happen is you give more power to early investors to sell to gullible people who are now locked into riding out the collapse. It does not do what you're expecting, but it does have the side effect of putting most of the pain on the latest people to participate, even more than would normally happen.

[DS999]

Requiring a long holding period isn't necessary.

You just need some small adjustments in the tax system. Maybe if you sell a stock on the same day you buy it any gains you make in that quick sale get taxed at 90%. Bingo, you've strongly discouraged day trading type speculation. It would put a big crimp in high frequency trading, but not eliminate it like the proposals for 0.1% stock transfer taxes would. Because you WANT some amount of high frequency trading, for the liquidity it brings to the market. It would still be profitable, just less profitable so there would be less of it. If there's still too much at 90% then raise it to 95%.

[IGotOut]

I have ZERO sympathy...

..for them if they do get hit very hard, in fact I can't wait

These companies have been proven to be cartels in the past and are doing the same again, just more blatant about it. Some of the people involved in the previous illegal activities are still with the same companies now.

So I hope the scumbags crash and burn.

[Anonymous Coward]

Re: I have ZERO sympathy...

Careful what you wish for.

Somewhere done the long line, it will be us plebeians who end up carrying the losses.

[elsergiovolador]

Call

I wish memory companies decided to call it a day and throw in the towel.

Imagine no more memory produced.

[a pressbutton]

Re: Call

Its easy if you try.

[elsergiovolador]

Re: Call

I lead by example and I am not producing any memory chips. I am the change I want to see in the world.

[CountCadaver]

Re: Call

So a modern take on "who needs more than 640kb"?

[Dan 55]

Micron can go do one

Not only are they holding prices up, they're lobbying Trump to put tariffs on Chinese chip makers, because they're not part of the collusion between the Big 3 memory suppliers.

I hope they're thoroughly undercut by the Chinese manufacturers and become a shadow of their former selves.

[Sorry that handle is already taken.]

"The RAMpocalypse may be the precursor to the AIpocalypse"

There have been AI winters before and there will be again.

[James 51]

You only have to look at what happened to GPUs during the cyrpto-crunch. The market did end up less crazy but it has never recovered. We're going to see the same here. In five years, most of the VCs will have stopped shoveling cash into the boiler but the memory market will never go back to what it was.

[Sorry that handle is already taken.]

I think it hasn't recovered because by the time the crypto mining bubble was winding down, a spicy cough from Wuhan was spreading across the globe, and then by the time the effects of that were subsiding the GenAI bubble was in full swing...

[James 51]

Lookat what happened with GPUs and the crypto-crunch. The market eventually got less crazy but it has never gone back to what it was before. Now we're seeing the same pattern with RAM and SSDs. This is why we can't have nice things.

[cyberdemon]

To the downvote above

FYI there was a 3-day outage of The Register forums, meaning that new posts were not displayed. Some people attempted to post a second time, assuming their first was lost in the æther, but all have appeared now, including the duplicates.

[Locomotion69]

In the end it is not the memory

While in the short term the memory price hike is affecting all (consumer) electronics, the real challenge is in the power grid becoming capable in feeding all these datacenters, while still being capable to serve us, simple households.

[MazeFrame]

DRAM Cartel 2.0

Memory makers like a lot of big tech has done their very best to tarnish their reputation.

Including their little price fixing venture which they naturally got a slap on the wirst for, so they are doing it again.

[Anonymous Coward]

Three more years of constant ram price hikes? That's madness.

[jake]

"the AI boom is the wildest ride of all"

The bust bit is what scares me ... and the longer it takes, the worse it'll be.

I'm completely out of tech investments for the first time since 1974ish. Odd feeling ...

[Anonymous Coward]

Re: "the AI boom is the wildest ride of all"

It'll be nasty, companies doing mass layoffs. The only trickle down effect is when companies down size and smaller companies go bust. Then comes poverty and increase in death rates.

I wonder how much if this memory investment is going to happen and is linked to projected AI demand / is normal investment for future developments and maintenance PR managed.

[Groo The Wanderer - A Canuck]

It certainly is a big bubble, and I can't blame the vendors for wanting to cash in, but leaving the desktop and laptop markets in the lurch is disgustingly greedy and despicable.

[David Hicklin]

Got to please the pesky shareholders, I think it was Samsung whose increase in sales/profits was not high enough and their share price fell

[ecofeco]

Slaves?

Nobody forced them.