alt Hacker NewsI want a more complete picture of why prices are so high from articles like this.
Is supply actively constrained, or is this mostly in anticipation of future shortages? How much of this is a mix of panic buying and price gouging on bad news?
I care more about the secondhand market. Prices are nuts for old used gear, but that also tracks with patterns I've been seeing since roughly the pandemic where more and more secondhand sellers on the usual platforms setting pricing patterns are small businesses, not hobbyists.
Replies
Memory makers are reluctant to increase fabrication (high cost of capital and boom/bust cycle leads to bankruptcies being common in the industry), and the memory required for AI (HBM) requires more of the production inputs than other types of RAM, thus squeezing regular DDR RAM even more. Long-form article describing this in more detail: https://davidoks.blog/p/ai-is-killing-the-cheap-smartphone
> Is supply actively constrained, or is this mostly in anticipation of future shortages?
Both. AI datacenters create immense demand on DRAM, NAND storage, even HDD storage.
Then Sam Altman went ahead and "bought" 40% of the world's DRAM production, by way of secretly approaching both Samsung and SK Hynix (each unaware of the other getting a similar deal), which sent the entire market into a panic and everyone rushed to buy ahead of the anticipated supply shortage.
The kicker is that it wasn't even a proper purchase agreement. Just a non-binding promise of "By 2030 I will have infinite dollars and buy your DRAM".
Supply is constrained. AI bought up so much that we're seeing wafer shortages. Absurd US tariffs messed with stuff. And we're just getting started.
[flagged]
Supply is both already constrained and AI companies have pre-purchased enough HBM at enough of a premium that most of the wafers are allocated to them. All the intermediaries are jacking up their prices so their inventory doesn't empty too quickly, because they may not be able to refill it.
It is hard to overstate the damage that the infinite money being poured into AI is doing to the wider economy. Anything involved in datacenters is going to experience shortages/price rises. A pre-existing problem is power transformers: https://www.reuters.com/business/energy/us-power-transformer...
The impact on domestic electricity prices in a year just after high oil prices is not going to be popular either.