Unfortunately its my understanding from this article that the type of RAM being demanded by AI data centers isn’t the same as standard DDR5 consumer memory.
I assume that means it won’t be possible to directly reallocate those chips to the consumer market when the AI bubble bursts. The manufacturers will have to switch their assembly lines back to consumer chip production and then supply will slowly ramp up as those facilities come back online.
While you are partly correct, the RAM used in AI datacenters is not the same shape as DDR5, they share a supply chain: The silicon that makes that RAM is being diverted from “consumer”, or even most “on-prem enterprise” RAM (DDR4/5/+) to datacenter RAM.
Memory manufacturers have been reallocating production capacity away from consumer products toward these more profitable enterprise components, and Micron has presold its entire HBM output through 2026. [emphasis added]
Because of that change in allocation, there’s a lower supply without a (much)lower demand, and the prices of consumer RAM will eventually rise to meet what the AI datacenters are willing to pay per unit of silicon. The shape doesn’t matter very much.
This change in supply has already had very visible effects in the consumer DDRX markets, like 100%-increases-in-a-month-visible.
That smartphones and other devices with RAM haven’t felt this yet is reasonable. They locked their manufacturing prices in before the spike in price, so there is a lag. That price increase will be felt by the consumer, though. We’re going to be hard pressed to compete for memory against these companies willing to throw billions of dollars around. Next year’s flagship phone price will be a gunshot.
The really sad, annoying, rage-inspiring part is that modern consumer goods never drop in price. When DDR6 hits $1k/8GB, or something like that, “they” will know some of us are willing to pay that price. This line only goes up, and AI datacenters are doing irreparable harm to consumer electronics as an industry.
Think about this: What is NAND Flash made of? We’re already seeing SSD prices rise too, especially in the NVME flavor. SD cards for your camera, cartridges for your switch, your fucking fridge. They all have silicon in them and this AI supply chain is guzzling silicon the way it guzzles power and water.
Unfortunately its my understanding from this article that the type of RAM being demanded by AI data centers isn’t the same as standard DDR5 consumer memory.
I assume that means it won’t be possible to directly reallocate those chips to the consumer market when the AI bubble bursts. The manufacturers will have to switch their assembly lines back to consumer chip production and then supply will slowly ramp up as those facilities come back online.
While you are partly correct, the RAM used in AI datacenters is not the same shape as DDR5, they share a supply chain: The silicon that makes that RAM is being diverted from “consumer”, or even most “on-prem enterprise” RAM (DDR4/5/+) to datacenter RAM.
Because of that change in allocation, there’s a lower supply without a (much)lower demand, and the prices of consumer RAM will eventually rise to meet what the AI datacenters are willing to pay per unit of silicon. The shape doesn’t matter very much. This change in supply has already had very visible effects in the consumer DDRX markets, like 100%-increases-in-a-month-visible.
That smartphones and other devices with RAM haven’t felt this yet is reasonable. They locked their manufacturing prices in before the spike in price, so there is a lag. That price increase will be felt by the consumer, though. We’re going to be hard pressed to compete for memory against these companies willing to throw billions of dollars around. Next year’s flagship phone price will be a gunshot.
The really sad, annoying, rage-inspiring part is that modern consumer goods never drop in price. When DDR6 hits $1k/8GB, or something like that, “they” will know some of us are willing to pay that price. This line only goes up, and AI datacenters are doing irreparable harm to consumer electronics as an industry.
Think about this: What is NAND Flash made of? We’re already seeing SSD prices rise too, especially in the NVME flavor. SD cards for your camera, cartridges for your switch, your fucking fridge. They all have silicon in them and this AI supply chain is guzzling silicon the way it guzzles power and water.