alt Hacker NewsThe memory makers will not expand demand drastically. It is in the nature of their business to keep the market under-supplied, otherwise the following oversupply will kill them. Instead, supply is just rerouted from less profitable segments such as mobile and personal computing.
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This is wrong. It is NOT in their nature to keep the market under-supplied -- eg, Samsung, the industry's largest company, was notorious for expanding their capacity during the industry downturn to gain market share while everyone else was cutting back to minimize loss.
I'm guessing you are also probably unfamiliar with the terms like "chicken game" which refers to the cutthroat, high-stakes price wars where dominant semiconductor manufacturers intentionally overproduce and slash prices. This is literally how the industry went from dozens to just three majors today since the 80's.
If the existing memory makers retains control of the market and don't defect from the optimal-long-term equilibrium for themselves, that's true. It just takes one player to defect for short term gains as we've seen with some past boom-and-bust cycles. Alternatively, it takes a sufficiently-resourced player with enough incentive to enter the market themselves (NVidia, Google, Amazon, the PRC government through one of many companies...)
Relevant article posted on HN about this a few days ago: https://davidoks.blog/p/ai-is-killing-the-cheap-smartphone
CXMT is scaling up incredibly fast, they are on a clock (south koreans) their monopoly will end relatively soon, although I'm guessing that the AI companies will crash before that anyways.
Reminds me of how Samsung is giving out $340,000 per person bonuses. Shows you how much of a stronghold they have in market.
Supply and demand always balance out. There is no way manufacturers aren’t going to compete away these inflated margins, as long as they feel like this demand is sustainable.
Apple could always decide to build their own fab or some such thing.
China is about to flood the market and prove this notion wrong. If there is demand they want to meet it with supply.
But to your point, that is exactly how American companies like to play now. No one is stopping them from screwing over the consumer.
I have a Micron near me and they are building another chip facility but we are years away still so I suspect China will beat them to the punch.