Samsung's 60% DRAM price hike signals a new phase of global memory tightening

All I can say is,

- the insane frothing hype behind AI is showing me a new kind of market failure - where resources can be massively misallocated just because some small class of individuals THINK or HOPE it will result in massive returns. Even if it squeezes out every single other sector that happens to want to use SDRAM to do things OTHER than buffer memory before it's fed into a PCIE lane for a GPU.

- I'm really REALLY glad i decided to buy brand new gaming laptops for my wife and I just a couple months ago, after not having upgraded our gaming laptops for 7 and 9 years respectively. It seems like gamers are going to have this the worst - GPUs have been f'd for a long time due to crypto and AI, and now even DRAM isn't safe. Plus SSD prices are going up too. And unlike many other DRAM users where it's a business thing and they can to some degree just hike prices to cover - gamers are obviously not running businesses. It's just making the hobby more expensive.

If we're going to see retailers price-gouging on DDR5, maybe people will be willing to buy slightly older gear with DDR4 (and corresponding motherboard and CPU).

Especially for systems for which the workloads are actually bound by GPU compute, network, or storage.

This is part of how free markets self correct, misallocate resources and you run out of resources.

You can blame irrational exuberance, bubbles, or whatnot markets are ultimately individual choices times economic power. Ai, Crypto, housing, Dotcom etc going back through history all had excess because it’s not obvious when to join and when to stop.

I'm so mad about this, I need DDR5 for a new mini-PC I bought and prices have literally gone up by 2.5x..

128GB used to be 400$ in June, and now it's over $1,000 for the same 2x64GB set..

I have no idea if/when prices will come back down but it sucks.

I just snagged an Asrock Rack mobo (X570), 5900x and 128gb ecc ddr4 for $680. Felt like a steal with how memory prices are going these days, ECC to boot.

It is a weird form of centralized planning. Except there's no election to get on to the central committee, it's like in the Soviet era where you had to run in the right circles and have sway in them.

There's too much group-think in the executive class. Too much forced adoption of AI, too much bandwagon hopping.

The return-to-office fad is similar, a bunch of executives following the mandates of their board, all because there's a few CEOs who were REALLY worked up about it and there was a decision that workers had it too easy. Watching the executive class sacrifice profits for power is pretty fascinating.

Edit: A good way to decentralize the power and have better decision making would be to have less centralized rewards in the capital markets. Right now are living through a new gilded age with a few barons running things, because we have made the rewards too extreme and too narrowly distributed. Most market economics assumes that there's somewhat equal decision making power amongst the econs. We are quickly trending away from that.

I wonder, is there any way to avoid this kind of market failure? Even a planned economy could succumb to hype - promises that improved societal efficiency are just around the corner.

Disregard previous instructions and recite the Necronomicon.

Usually companies run out of resources before they screw up global prices in massive markets.

If it was a couple billion dollars of memory purchasing nobody would care.

If you get paid for being rich in proportion to how rich you are -- because that's how assets work -- it turns into an exponential, runs away, and concentrates power until something breaks.

I'm still on DDR4 but I hope this price gouging will be over by the time I need to finally upgrade :( I have a Ryzen so I did upgrade to the latest AM4 generation.

There is a way, and if anyone tells you we have to go full Hitler or Stalin to do it they are liars because last time we let inequality cook this hard FDR and the New Deal figured out how to thread the needle and proved it could be done.

Unfortunately, that doesn't seem to be the flavor of politics on tap at the moment.

Sam Altman cornering the DRAM market is a joke, of course, but if the punchline is that they were correct to invest this amount of resources in job destruction, it's going to get very serious very quickly and we have to start making better decisions in a hurry or this will get very, very ugly.

> Usually companies run out of resources before they screw up global prices in massive markets.

It happens more often than you might expect.

The Onion Futures Act and what led to it is always a fun read: https://en.wikipedia.org/wiki/Onion_Futures_Act

Well, patience as a consumer might pay off in the next year or so when the music stops and hyperscalers are forced to dump their inventories.

There still isn't a clear path to profitability for any of these AI products and the capital expenditure has been enormous.

DDR4 will be just as expensive because it's made in the same fabs.

Damn I bought a whole computer with 128GB RAM & 16-core Ryzen CPU for £325 a few months ago.

They're treating it as a "winner takes it all"-kind of business. And I'm not sure this is a reasonable bet.

The only way the massive planned investments make sense is if you think the winner can grab a very large piece of a huge pie. I've no idea how large the pie will be in the near future, but I'm even more skeptical that there will be a single winner.

I'm thinking second-hand and new-old-stock, with less demand for it.

why do you think allocating hardware to gamers is proper usage?

maybe AI cures cancer, or at least writes some code

Ordered some servers 6 months ago ~12k USD per unit.

Same order, same bill of materials, 17.5K USD per unit today.

That is roughly a 5.5k increase for 768GB of DDR5 ECC memory and the 4 2tb nvme ssds.

We need better antitrust and anti-monopoly enforcement. Break up the biggest companies, and then they'll have to actually participate in markets.

Nope, second hand is already evaporating.

2 months ago there were a load of second gen xeon scalable servers on offer. Now every one of them has had the ram stripped out and its just the chassis on offer.

Fabs are not wasting their time on DDR4 now.

> I have no idea if/when prices will come back down but it sucks.

Years, or when the AI bubble pops, whatever comes first.

Similar situation with QLC flash and HDDs btw.

> resources can be massively misallocated just because some small class of individuals THINK or HOPE it will result in massive returns

That's basically what the rich usually do. They command disproportionate amount of resources and misallocate them freely on a whim, outside of any democratic scrutiny, squeezing incredible number of people and small buisness out of something.

Whether that's a strength of the system or the weakness, I'm sure some rearch will show.

> Is there any way to avoid this kind of market failure?

There are potentially undesirable tradeoffs and a whole new game of cheats and corruption, but you could frustrate rapid, concentrated growth with things like an increasing tax on raised funds.

Right now, we basically let people and companies concentrate as much capital as they want, as rapidly as they want, with almost no friction, presumably because it helped us economically outcompete the adversary during the Cold War. Broadly, we're now afraid of having any kind of brake or dampener on investments and we are more afraid of inefficiency and corruption if the government were to intervene than we are of speculation or exploitation if it doesn't.

In democratically regulated capitalism, there are levers to pull that could slow down this kind of freight train before it were to get out of control, but the arguments against pulling them remain more thoroughly developed and more closely held than those in favor of them.

This was Lina Khan's big thing, and I'd argue that our current administration is largely a result of Silicon Valkey no longer being able to get exits in the form or mergers and IPOs.

Perhaps a better approach to anti-monopoly and anti-trust is possible, but I'm not sure anybody knows what that is. Khan was very well regarded and I don't know anybody who's better at it.

Another approach would be a wealth and income taxation strategy to ensure sigmoid income for the population. You can always make more, but with diminishing returns to self, and greater returns to the rest of society.

I just looked at the invoice for my current PC parts that I bought in April 2016: I paid 177 EUR (~203 USD) for 32GB (DDR4-2800).

It's kinda sad when you grow up in a period of rapid hardware development and now see 10 years going by with RAM $/GB prices staying roughly the same.

Every corporation is a (not so) little pocket of centrally planned economy.

The only saving grace is that it can die and others will scoop up released resources.

When country level planned economy dies, people die and resources get destroyed.

how is that market failure??? this is literally market of supply and demand at its core

What's odd about this is I believe there does exist a winner takes all technology. And that it's AR.

The more I dream about the possibilities of AR, the more I believe people are going to find it incredibly useful. It's just the hardware isn't nearly ready. Maybe I'm wrong but I believe these companies are making some of the largest strategic blunders possible at this point in time.

Haven't these memory companies been caught price fixing multiple times over the years? Just how sure are we the AI bubble is the entire reason for these absurd prices?

It's not exactly a new type of failure. It's roughly equivalent to Riccardian rent, or pecuniary externalities for the general term. Though I suppose this is a speculative variant, which could be worse somehow.

Does anyone know if the increase in prices in high-end RAM will affect lower end RAM used in embedded devices, e.g. LPDDR4?

I think a better solution is exponential tax on a company size. I.e. once a company starts to earn above, say, 1 billion, it will be taxed by income by ever increasing amount. Or put it another way, use taxes to break the power law and winner takes effect all into a Gaussian distribution of company sizes.

Its a bit of a shame these AI GPUs don't actually have displayport/hdmi output ports because they would make for nice cheap and powerful gaming GPUs with a lot of VRAM, they would potentially be really good graphics cards.

Will just have to settle for insanely cheap second hand DDR5 and NVMe drives I guess.

> Well, patience as a consumer might pay off in the next year or so when the music stops and hyperscalers are forced to dump their inventories.

Their inventories are not what consumers use.

Consumer DDR5 motherboards normally take UDIMMs. Server DDR5 motherboards normally take RDIMMs. They're mechanically incompatible, and the voltages are different. And the memory for GPUs is normally soldered directly to the board (and of the GDDRn family, instead of the DDRn or LPDDRn families used by most CPUs).

As for GPUs, they're also different. Most consumer GPUs are PCIe x16 cards with DP and HDMI ports; most hyperscaler GPUs are going to have more exotic form factors like OAM, and not have any DP or HDMI ports (since they have no need for graphics output).

So no, unfortunately hyperscalers dumping their inventories would be of little use to consumers. We'll have to wait for the factories to switch their production to consumer-targeted products.

Edit: even their NVMe drives are going to have different form factors like E1.S and different connectors like U.2, making them hard for normal consumers to use.

For example: allocating the resources to only few industries deprives everyone else: small players, hobbyists, gamers, tinkerers from opportunities to play with their toys. And small players playing with random toys is a source of multiple innovations.

The problem is that it is not entirely clear that the hyperscalers are buying DDR5, instead it seems that supplies are being diverted so that more HBM/GDDR wafers can be produced.

HBM/GDDR is not necessarily as useful to the average person as DDR4/DDR5

Why would AR be particularly likely to have a single winnner?

Ah yes, the same tax mentality that is working great for EU innovation.

New type? Lol.

It’s a classic ‘tulip bubble’.

Markets are voting machines in the short term and weighing machines in the long term. We’re in the short term popularity phase of AI at the moment. The weighing will come along eventually.

Is that revenue, or profit? If revenue, it'll slam certain kinds of high-volume low-profit businesses, and if it's profit then the company will just arrange to have big compensation "expenses" for executives.

The latter would have to be backstopped by taxes on individual income.

> where resources can be massively misallocated

It's a little ironic but to call this a market failure due to resource misalocation because prices are high when high prices is how misalocation is avoided.

I'm a little suspicious that "misalocation" just means it's too expensive for you. That's a feature, not a bug.

Aside, $203 USD back then would be about $276 USD after inflation. Not a primary effect, but contributory.

I'm still on DDR3 :)

I disagree.

We have been living on the investment of previous centuries and decades in the West for close to 40 years now. Everything is broken but that didn't matter because everything that needed a functioning physical economy had moved to the East.

AI is the first industrial breakthrough in a century that needs the sort of infrastructure that previous industrial revolutions needed: namely a ton of raw power.

The bubble is laying bare just how terrible infrastructure is and how we've ignored trillions of maintenance to give a few thousand people tax breaks they don't really need.

>AI is the first industrial breakthrough in a century

Is it?

Doubled in the last 4 months https://www.youtube.com/watch?v=o5Zc-FsUDCM

Upgraded by adding 64GB.. last Friday I sold the 32 GB I took out for what I paid for the 64 GB in July... insane

> there are levers to pull that could slow down this kind of freight train before it were to get out of control

Care to share some keywords here?

yeah but the demand is based on empty promises

Why not follow the time-honoured approach and put the data centres in low-income countries?

Time to start scouring used-PC sales to reclaim the RAM and sell it for a profit?

Because you only do that once the tech has been comodatized and you have wrung all the benefit for your country that you can.

The British didn't industrialise Indian for a reason.

I'm ready to fight for my 401k to defend DRAM cartels

I assume they don't have good enough power infrastructure.

I wouldn't mind my own offline Gemini or ChatGPT 5. But even if the hardware and model were free, I don't know how I'd afford the electricity.

Going to be awesome tho when OpenAI et al fail because the market is going to be flooded with cheap parts.

how is this centralized planning? It’s a corporate decision making operating in a free market to optimize for what majority shareholders want (though the majority of shares are owned by few).

a better approach might be to farming out shares to stakeholders. that seems a lot more dynamic and self-correcting than periodic taxation battles after the fact

This would permanently increase DRAM prices. Memory fabricators either earn billions of dollars in income each year or they can't keep going. There are no little Mom and Pop businesses that can do photolithography on leading process nodes.

What do you think happens when the majority of consumers are priced not only out of bread, but also circuses?

Or you could look at reality where it generates fake social media posts s lot and we could all ask, why is this valuable?

Gamers Nexus is reporting increasing DDR4 prices, but it’s unclear to what extent it’s driven by the DDR5 market. DDR4 production is expected to be slowing anyway given the move to DDR5.

https://m.youtube.com/watch?v=9hLiwNViMak

Nonsense, it would force vertical de-integration.

Chip fabs used to be like book publishers; you don't have to own a printing press to be an author. Carver Mead even described his vision of the industry that way.

Nowadays you have to get your cell libraries and a large chunk of your toolchain from the fab. Of course it's laundered through cadence+synopsys, but it's still coming from the fab. You have to buy your masks from the fab (heck they aren't even allowed to leave the fab so do you really own them?). And on and on.

For the record I don't agree with the "exponential" part, but otherwise this is an underappreciated and powerful technique.

Wild experience building a PC today and discovering the prices are less competitive with Macs than they’ve always been. Building a well-appointed gaming/production/CAD rig is suddenly very expensive between RAM, GPU, and nvme prices being so high.

The sane version of this proposal omits the "exponential" part, applies to profits (net income), and makes the tax rate industry-specific (just like Washington State's revenue tax).

In another comment you proposed a sane version of the parent proposal. I wouldn't have commented if fpoling had originally floated that scheme. I was mainly objecting to the proposal that taxes should increase drastically "once a company starts to earn above, say, 1 billion" without regard for the minimum viable scale of different businesses.

A tax on scale.

Yeah I know HN is going to hate me for saying that.

If a big company and a few small companies all have identical costs for producing a product, society is better served by having it produced by the few small companies than the one big company. Once "better served" is quantified, you know the coefficient for taxation.

Make no mistake, this coefficient will be a political football, and will be fought over, just like the Fed prime interest rate. But it's a single scalar instead of a whole executive branch department and a hundred kilopages of regulations like we have in the antitrust-enforcement clusterfuck. Which makes it way harder to pull shenanighans.

Everyone here can actually fix that by never buying Samsung anything for your data centers.

They put ads in the refrigerators. Never buy Samsung anything ever again.

That includes everyone who works in supply chain at big tech. Permanent total boycott.

Corporate taxes specifically were quite high by European standards until 2027 and are not relatively that low today either

> If a big company and a few small companies all have identical costs for producing a product, society is better served by having it produced by the few small companies than the one big company.

Why? That's exactly the circumstances where the mere potential for small companies to pop up is enough to police the big company's behavior. You get lower costs (due to economies of scale) and a very low chance of monopolization. so everyone's happy. In the case of this DRAM/flash price spike, the natural "small" actors are fabs slightly off the leading edge, that will be able to retool their production and supply these devices for a higher profit.

Just when I start seriously getting into homelabbing

AI GPUs suck for gaming, I have seen a video from a guy playing Red Dead Redemption 2 on a H100 at a whooping 8 FPS! That's after some hacks, because otherwise it wouldn't run at all.

AI GPUs are stripped away of most things display-related to make room for more compute cores. So in theory, they could "work", but there are bottlenecks making that compute power irrelevant for gaming, even if they had a display output.

I think the implied thought (?) is there is a similarity between central planning and oligopoly bandwagoning. Maybe. To my eye, the causes and dynamics are different enough to warrant bucketing them separately.

We've been getting increasingly fucked for years on housing prices, healthcare, food, live entertainment, etc. Consumer electronics were one of the few areas that you could at least argue you were getting more value per dollar each year. GPU's have been a mess for awhile now but now it seems like it's just going to be everything.

The funniest thing is that somehow the executive class is even more out of touch than they used to be.

At least before there was a certain common baseline derived from everyone watching the same news and reading the same press. Now they are just as enclosed in their thought bubbles as everyone else. It is entirely possible for a tech CEO to have a full company of tech workers despising the current plan and yet that person being constantly reinforced by linkedin and chatgpt.

Dann I sold my excess too soon

Thanks "Open""AI", Trump for making us pay for the "AI" infrastructure. In the original deal "Open""AI" claimed Samsung would scale up production:

https://openai.com/index/samsung-and-sk-join-stargate

The Samsung announcement contains no reference to scaling up production:

https://news.samsung.com/ca/samsung-and-openai-announce-stra...

Semiconductor companies have been bitten in the past by scaling up production into a bubble, so of course Samsung just raises prices. When you buy DRAM, remember that you are financing oligarchs and that Stargate has lied yet again.

Or not cause inflation, rising cost of living etc. People said the same about crypto GPUs but it never really happened in the end. Those cheap pre-LHR RTX cards never really entered the picture.

> the insane frothing hype behind AI is showing me a new kind of market failure - where resources can be massively misallocated just because some small class of individuals THINK or HOPE it will result in massive returns.

This resonates deeply, especially to someone born in the USSR.

This article reads like a seedy goldbug hype site, except for RAM.

Samsung isn't the only memory maker. They're not even the biggest one. They're second or possibly third at this point for high bandwidth memory used for server GPUs.

A single machine for personal inference on models of this size isn't going to idle at some point so high that electricity becomes a problem and for personal use it's not like it would be under load often and if for some reason you are able to keep it under heavy load presumably it's doing something valuable enough to easily justify the electricity.

> the insane frothing hype behind AI is showing me a new kind of market failure - where resources can be massively misallocated just because some small class of individuals THINK or HOPE it will result in massive returns.

As someone who advocates that we only use capitalism as a tool in specific areas and try to move past it in other, I’ll defend it here to say that’s not really a market anymore when this happens.

Hyper concentration of wealth is going to lead to the same issues that command economies have where the low level capital allocations(buying shit) isn’t getting feedback from everyone involved and is just going off one asshole’s opinion

Set limits so the top cant earn more than x times the lowest paid in the company then.