Would they?

Cartels aren't known for massively increasing production to satisfy all demand. Far from it I'd say, they're more likely to expand supply to such a level that they can still reap massive profits. Very few countries/companies have the knowhow and willingness to be able to build more.

OPEC is a perfect example of this behaviour. They set hearly production goals to keep prices high. Or the Quebec Maple Syrup Producers organization that limits the amount of syrup a farmer can produce and sell in a year to keep prices high.

Large barriers to entry are anathema to competitive markets, so the conclusion here is still that firms are benefitting from the lack of a competitive market.

I didn't say the build out time was months.

I said:

> the test isn't "how much is price going up" it's "how aggressively are the RAM producers expanding supply production"

I'm curious what the limiting factor is for "years not months" when building these fabs. DRAM is a commodity, there are only threeish major manufacturers, all have huge amounts of capital, multiple nations bend over backwards for new semiconductor production projects, and there seems to be unlimited money going into purchasing these things.

Even when it comes to manufacturing the tooling/testing infrastructure, it's just a question of money aiui.

Generally speaking, if demand stays high, and existing suppliers don't increase supply, the high prices create an incentive and opportunity for new market entrants to increase the supply.

> There was no way for them to serve the AI demand without reducing supply given to everyone else in the short run

I didn't say that there was a way to do it in the short run. I laid out what the test is to determine if there's cartel-like behavior or competitive-market-like behavior.

I will say, in a market with only 3 players and very high cap-ex cost, my prior is that you're likely to see more cartel-like behavior than competitive-market-like behavior, but that's still to be determined.

Profitably-for-the-fabs*

Yes when there are large fixed costs to expanding production, that will happen more slowly, after determining that the high demand isn't just a short term spike.

It's not like wheat, where you just can just plant more at marginal cost (I'm sure someone in farming will now explain why that isn't exactly true either).

I feel like I and HN live in different worlds,

https://www.blocksandfiles.com/ai-ml/2026/01/20/samsung-sk-h...

Big manufactures have absolutely cut production of lower margin products and it's not like they can re-purpose all of the equipment used for it for HBM yet. edit They can definitely focus more resource because of it on HBM though.

Things have improved a bit since govts are starting to get angry.

Tldr; no one is cutting the production of high margin stuff, but low margin stuff can go and die, because it's not a free market it's a stock market these companies want to show off better margins in every unit there is no reason to keep inefficient things running when not doing it pays more.

They just don't want 30-40% margins anymore. That is not free market that is quite literally serving their own interests because they know there is a monopoly.

All big memory manufacturers are heavily supported by the govt, that's what has made them the monopolies they are Micron supported by USA (they crushed Japan's memory industry for it), and Korean giants are more tangled up with the govt than well most people in US would realize.

Somehow people think free market means anything goes, which honestly is where we stand today so I don't blame anyone.

But using govts to crush competitions and build yourself up on subsidies and similar isn't really free markets. China hasn't been able to grow a significant memory chip industry yet because of lack of EUV machines and similar technologies blocked by the US, which is also not "free market".

As for WD, and Sandisk separating I feel like this was more mutual and they new HDDs or SSDs being together was a distraction for both. Which feels more strategic, think of it like this, the shareholders who had the shares how hold shares in both and together they might have likely been worth less so shareholders made money.

Aka good for free market. I don't see how that relates to the actual memory crunch issue more broadly.

How about I threaten you with mandatory 10 Electron applications / AI agent harness on your computer? Now you must be ready to fund my venture :)

Then perhaps we’re seeing one of the downsides of that. When 0->1 is prohibitively expensive, existing players can continue to raise prices *very* high because cost-of-entry is extreme, until it’s not sufficiently extreme.

And then we have bubble issues because the introduction of a new, cheaper player, causes the bottom to fall out and for the circumstances that allowed the new manufacturer to exist to completely go away.

At a longer timescale than very temporary supply shocks, I believe what I said is correct. The basic point is that if supply contracts, demand must contract as well, which in a free market happens via price increases and in an unfree market happens via shortages (i.e., the inability of buyers to obtain a good at a market-clearing price). If high barriers to entry are relevant in this context (obviously they very much exist in the memory industry!), then please enlighten me how, if you are capable of doing so without unconstructive snark.

The manufacturers are not doing a whole lot to fix the problem l and I don’t blame them. It’s expensive to build out and they know demand will slow down and don’t want to be stuck with excess capacity. Better to be sold out and high prices.

Samsung said they were “moderating demand” which doesn’t sound like they want this problem to be solved either.

What about YMTC?

The difference between 2002 and now is that it is so much easier to follow each other's leads on pricing without explicitly communicating about it and leaving a paper trail. But they never stopped acting indistinguishable from a cartel.