What was most surprising about all this to me was this line:

> So modern DRAM manufacturing is an extraordinarily complex and expensive process. Building a single state-of-the-art DRAM fabrication facility, a “fab,” will cost you about $15 to $20 billion; acquiring all the necessary equipment, like lithography tools and etching machines, will cost you another few billion; and then it’ll take you a few years of producing substandard and defective memory chips before your yields start to look competitive.

Extraordinarily complex and expensive! And yet I look at all the money being shuffled around between Nvidia and Google and Microsoft and Amazon and Apple and can't help but think that this is a tiny amount in comparison to what they're moving around on the stock market buying shares in each other.

Apple in particular has $20B in its couch cushions and is very vertically integrated and hardware-focused. Apple silicon is currently made by TSMC, but it seems they'd be a prime candidate to spin up their own memory fab.

I suppose the biggest problem to current executives at each company is the "few years" until that investment yields results, in the short term it's better to pay through the nose and buy GPUs with HBM at any price.

> it seems they'd be a prime candidate to spin up their own memory fab.

While Apple et al certainly have the money to tilt up their own fab, they're savvy enough to understand the memory market's long history of constant boom/bust cycles. I still remember the huge DRAM shortage in late 80s forcing my startup at the time to delay launching our new product for a year.

People assume Apple cares about vertically integrating cost but they're actually focused on integrating margin. Apple has billions in cash on hand and when they think about what to do with it, a key metric is Return on Capital, especially the margin that capital will generate. Since a core metric public companies are judged on is blended margin, they are looking for ways their bags o' cash can be put to work generating revenue at margins that will pull their current average margin up vs down.

Averaged over time, mainstream memory devices are historically one of the worst margin areas of the semi market. It's super expensive to tilt up a fab on a new node but once you do, turning the crank faster to make a lot more chips isn't too hard because mainstream DRAM tends to be quite uniform. So when a fab on a new node and/or RAM generation first opens, the margins tend to be pretty great. But as the node matures and/or the RAM generation goes from 'new' to 'commodity', competition heats up as everyone gets better at making more faster. Then they're tempted to maximize revenue by cutting prices until their mature fab is at 101% utilization. And that eventually drives margins down until someone's selling near cost to sustain their low-price-enabling volume - with occasional dips below cost when they get stuck holding excess inventory. That's why cash-rich companies with high margins like Apple are delighted to buy DRAM built with Other People's Money. As long as the DRAM market is under competitive pressure, Apple gets to shop their huge orders around to get the absolute lowest price on RAM that was built with other investor's low margin dollars.

And what happens if the market settles back down or the leading memory tech pivots away from what you invested all this capital and time chasing?

You'd need a very strong, very particular forecast to make such a costly bet. And conversely, it may say something about their internal forecasts that they're not making the bet.

> Apple in particular has $20B in its couch cushions

I wonder how long it REALLY took them to move from intel to apple silicon, which they don't even make.

It might be easy, like a consumer deciding to generate their own electricity (pv on the roof)

or it might be slightly harder, like a consumer deciding to generate their own electricity by drilling for oil, refining it, etc...

Part of this is a lie high prices for equipment has a lot to do with monopolies in the whole supply chain and one of the major reason I am rooting for China to get parity on node as that would mean it would have been able to break all the monopolies and we get competition on the whole production from uv machines, wafer, on equipment for storing etc. Renewables are rapidly taking the world to very cheap or free energy but it would be bad if the way to best use the energy for production is controlled by a few corporations

Literally the most overwhelming thought, reading this, is "man, capitalism is a mistake"

The amounts of money circulating whilst some of us struggle to make rent ...

Nothing fair, or just, about this world we live in