In an absolutely free market? sure. But we don't live in an absolutely free market, the memory manufacturers have refused to budge on creating new fabs until recently out of caution and to be able to create a demand excess.

They have slow rolled rollouts and everything, if there wasn't CXMT they would probably still wouldn't have budged on building new fabs for a while longer.

You can absolutely price fix/manufacture a shortage. Ever heard of merchants setting fire to crops after hoarding to sell at a higher price?

The issue is the distributer and producer are the very same people this essentially means producers have no incentive to rationalize supply, they can make much more money of the long drawn out shortage.

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cm2187 3 hours ago | parent | next [-]

I think everyone is aware now that you don't build a fab by snapping your fingers, and you need to amortise it over many years. The said manufacturers are just out of a massive slump in demand during covid, when they were selling at a loss, and these cycles happened many times in this industry. It is understandable that they don't jump all-in on the AI bandwagon, which, god knows where it is going and for how long.

If you want evidence that no one predicted this, look at WD. They disinvested from sandisk up to early this year. Now sandisk is worth more than WD. Doesn't seem consistent with a concerted strategy to gauge prices.

> You can absolutely price fix/manufacture a shortage. Ever heard of merchants setting fire to crops after hoarding to sell at a higher price?

Fine. Show me which manufacturer is cutting production to corner the market. I don't see that.

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SoftTalker 3 hours ago | parent | next [-]

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).

	▲	HWR_14 an hour ago \| parent [-]
		I'm not super familiar with farming, but I'm pretty sure there is an upper bound on how much wheat you can plant dictated by the amount of land you own.

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minraws 2 hours ago | parent | prev [-]

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.

	▲	cm2187 an hour ago \| parent [-]
		Margins pre-AI were more like 5-15%. Even if the margin was 5%, if prices increased 5 times but product cost didn't move, then margins are now 80%. That's not a 30-40% product, your argument doesn't make any sense.

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benlivengood 3 hours ago | parent | prev | next [-]

Feel free to spin up a fab and undercut the current prices, I'd certainly appreciate it!

I don't know if I would personally fund such a venture though, for roughly the same reason existing manufacturers aren't expanding production.

	▲	geodel 2 hours ago \| parent [-]
		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 :)

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dist-epoch 3 hours ago | parent | prev | next [-]

> the memory manufacturers have refused to budge on creating new fabs

That's EXACTLY how a free market is supposed to work. The existing memory manufacturers are FREE to not build new factories, and anyone else is FREE to build those factories in their place.

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t-writescode 3 hours ago | parent [-]

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.

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leni536 2 hours ago | parent | next [-]

In addition of being expensive, it's also a gamble. If it wasn't risky then I don't think financing it would be that big of an issue.

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dist-epoch 3 hours ago | parent | prev [-]

This is also caused by the FREE market - consolidation, all markets tend to consolidate around a few companies due to economy of scale.

The fix is regulation - we are going to have NOT-FREE-MARKET electricity, NOT-FREE-MARKET water supply, .... for vital services.

I'm not talking about you, it's funny to see anti-regulation HN complain about a FREE MARKET working as such. Suddenly it's not so fun where you are at the losing end of the free market when it turns out some are willing to pay way more for RAM than you are.

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carlosjobim 2 hours ago | parent [-]

Everybody needs electricity and water, but nobody needs more RAM except for companies. And they can pay for it.

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paunchy an hour ago | parent | next [-]

You can travel to the ends of the earth, to a village down miles and miles of dirt roads and still see someone bent over their phone. People buy RAM.

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Iolaum 2 hours ago | parent | prev [-]

Hello!? Us consumers need it too.

	▲	doubled112 an hour ago \| parent \| next [-]
		Really depends how you're defining "need". Will you die without it? Will your life as you know it end if your next phone has 8GB instead of 12GB?
	▲	carlosjobim an hour ago \| parent \| prev [-]
		You need 8GB at the very most, which isn't out of reach for any consumer. If you need more, then you are a professional and can afford more. Or you are a hobbyist, and your hobby doesn't deserve any subsidies from the hard working tax payer.

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veqq 3 hours ago | parent | prev [-]

> But we don't live in an absolutely free market, the memory manufacturers have refused to budge on creating new fabs until recently out of caution

...that's how the market works. This is called capital discipline and is standard across industries. If the increase in demand is temporary, they would be spending 5-10 years of profit on facilities which will only lose money. The same works in non-capitalist economies too, you don't want to waste resources on stranded assets and many still believe this RAM demand is temporary and the house of cards will collapse.