The argument I've seen about why someone else doesn't start selling RAM is it takes a year or two to ramp production. But here's a CEO saying he's going to make sure prices stay high enough, long enough that you can spin up a competitor

They are not prioritizing extremely high prices. TSMC has a similar waiting list, so does ever other tool manufacturer. Memory capacity is being increased approximately as fast as it can be.

Micron has several fabs and fab upgrades coming online or under construction right now. An expansion in Boise and Virginia. Plus a huge megafab project in New York that's going to be the biggest in the world AFAIK.

All the DRAM makers have new fabs or plant expansions underway right now - indicating they believe the demand increase to be sustainable.

I think neither CEOs nor boards of the public companies care. They want to maximize their paychecks and bonuses in the short term before they leave to other companies.

Oil is sky high, a recession might be near. Also, optimizations (like the current KV one) can yield a drastic reduction in RAM needs. It's a risk.

If I was trying so stabilize (just stabilize) funding for humongously expensive fabs: I'd be giving markets reassurances that my business will continue to be high margins for the mid-future.

Well it would depend how much higher prices and for how long until competition could arrive. Any business that could sell stuff at 10x prices for 10 years would make enough extra money that it would be worth it even if they knew bankruptcy would happen in year 11.

This is a very difficult supply chain in which to compete, even nation states mostly can’t. The machines that build the chips are really hard to come by and even China is just hoping they can start to make them in 2030 and they likely cannot. Meanwhile demand is accelerating.

History does not drop financial gifts like this in one industry’s lap often. From a sheer numbers standpoint, what they’re doing absolutely is the only logical choice.

Whether they did this or not, I think the exponential demand for memory would still be there. So there would still be conditions that encourage new competing manufacturers.

There is 3 companies that make memory - they ALL want to keep memory prices high for as long as possible.

First line of your post was enough.

Or it just be that demand really does seriously exceed supply. It's not fast to bring supply online, it's costly and risky to do so if the demand will not be sustained for a long time. IMO, there's no conspiracy. I have been telling folks for the last 3 years that the price of AI compute is not coming down for a good 5+ years. Possibly 10 years too. Every human in the world will need AI, the same way we all got on the internet and then mobile. However, outside of humans, for every human there's going to be ten or hundreds of agents also all demanding compute.

> because I prioritized extremely high prices for a few years that might have the effect of changing the arithmetic for potential competitors that wouldn't have done it before.

Or maybe they believe the demand is not sustainable, and they don't want to fund $10B ghost fabs.

> extremely high prices for a few years that might have the effect of changing the arithmetic for potential competitors that wouldn't have done it before.

The big problem is, competitors need money. Say a fab costs 10 billion $ a piece, that is a big chunk of investment needed that absolutely needs to be paid back because even a big bank consortium will have a hard time shouldering this kind of single risk.

Now, the fab needs around three years to build... which means if there suddenly comes a huge amount of new supply or alternatively, the AI bubble pops, prices will crash, the companies won't be able to service the loans, and the banks will be sitting on a very expensive piece of real estate and machinery.

Particularly in semiconductors, this "bust and boom" cycle, "pork cycle" or however you want to call it, is very very well known. Banks and other investors have been through that one more often than you can count, that's the reason why there are so few producers left after all.

The only place I think can reasonably pull it off to start a competitor is China because their economic policy is focusing on decades in the future and the CCP is willing (and able) to shoulder the risk - however China can't acquire EUV machinery due to sanctions and will likely take a few years until they can pull it off on their own, by the time TSMC et al will already be at the next generation.

Not enough people are prepared if this isn't a bubble. I think he's betting on this being a bubble which would imply building more supply would be a mistake, because they'll end up with a factory and no more customers.

It's starting to look more and more like we will always need more memory.

How much of this issue is self-inflicted? Micron is building a massive fab in Syracuse. They've spent like 4 years seeking approval, lobbying politicians, doing BS "environmental impact studies" (which are mostly just rent seeking and political handouts). They finally started building, but if they had just been able to put shovel in the ground we would already have this fab be producing memory.