Thread

Micron CEO Says Memory Supply Will Be Much Tighter in 2027 and 2028 Than in 2026

394 points · 443 comments · speckx

ocd · 1790861971 · focus · HN ↗
I'm not a business guy, but I think I would be very worried if I created any opening (even on the very long term) for competition to justify itself being built up to meet demand (or national security requirements of other countries) on an industry I mostly control, 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.
It makes me consider whether there would be retaliation in later years against the US intellectual property system in countries other than China. While RAM is a tangible product, the areas it serves aren't really.
1. radford-neal · 1790870747 · focus · HN ↗
  If I understand this comment correctly, it's saying that Micron and the others would be better off selling RAM at below the price they could get, in order to keep competitors from deciding to enter the market.
  Such collusion might well be a violation of anti-trust law, but in any case, it wouldn't work. If they decide to sell at below-market price, they must (by definition) be preventing some customers from buying by some non-price mechanism (eg, only selling to companies run by other members of the CEO's family). Potential competitors would then see an opportunity to sell to these excluded customers.
  1. christina97 · 1790871054 · focus · HN ↗
    Yeah there is no such thing as selling a commodity below its market price on the open market. Someone else will come and arbitrage that away, or it’s not an open market.
    fmbb · 1790871314 · focus · HN ↗
    Supply is severely limited and there is not really any competition making RAM chips, so it is kind of not a commodity and not a market.
    But you are right someone will arbitrage the price, like scalpers selling concert tickets.
    sdenton4 · 1790872309 · focus · HN ↗
    Well, that's blatantly false...
    A well-known anticompetitive tactic is for a big player with a vast bank account to move into an area and eat losses while waiting for their competitors to starve. Well observed in the 90's movie rental market, so certainly real.
    DaSHacka · 1790874656 · focus · HN ↗
    Also why anti-dumping laws exist
    hungryhobbit · 1790875428 · focus · HN ↗
    Do those solve the problem just outlined?
    (Legitimately asking: I don't know the answer ... but based on most US business law my strong suspicion is ... no, they don't.)
    DaSHacka · 1790875896 · focus · HN ↗
    No, because they're hardly enforced. China has been blatantly dumping a buttload of products for decades and the U.S. has been asleep at the wheel as it continues to hollow out our domestic manufacturing industries even further.
    guelo · 1790881983 · focus · HN ↗
    Silicon Valley and other venture backed enterprises also regularly dump into various markets without consequences.
    Dylan16807 · 1790907086 · focus · HN ↗
    Like what? Everything I've seen is that parts are legitimately much cheaper in China and they're making good money selling to the US.
    tpm · 1790931693 · focus · HN ↗
    > China has been blatantly dumping a buttload of products for decades
    By that account China would be bankrupt by now because subsidizing a "buttload" for "decades" does cost a lot of money.
    I think the reality is much more subtle - they force their way into a new market if needed and then stop and let the market forces do their thing.
    TitaRusell · 1790932292 · focus · HN ↗
    The US has tens of millions of poor people who are kept alive because of cheap shit from China.
    tancop · 1791034211 · focus · HN ↗
    Dumping means losing money. China is winning because they give businesses low interest loans from a state owned bank (or invest capital from a state fund) to expand production. Factories are profitable the whole time, they just don't waste money and time getting private loans.
    America can't do that because the government takes bribes from banks and believes in Friedmanite ideology where state investment is evil. It's a great opportunity for Europe to copy China and become independent.
    saltcured · 1790876553 · focus · HN ↗
    The statement further up should have qualified it as "scarce commodity". Then it is correct.
    To successfully perform dumping, you have to have access to excess supply capable of disrupting that market.
    mr_toad · 1790884912 · focus · HN ↗
    You don’t lower your prices on the off chance a competitor might enter the market in the future. You wait until they have invested capital but before they start making profits and are at their most vulnerable.
    vanviegen · 1790885846 · focus · HN ↗
    I don't think that would work. They wouldn't demolish the competitor's factory when it goes bankrupt. Instead the factory, being an asset, gets sold for cheap, and another company gets a shot at competing while having much lower debts. This process could repeat a few times until the debt is low enough to profitability compete.
    So if that's the expected outcome, it might be better to prevent competitors from building factories in the first place.
    tyromaniac · 1790945322 · focus · HN ↗
    In any case these fans would take fae longer to get into production than the projection of when the price falls anyway
    m4rtink · 1790951215 · focus · HN ↗
    I would not single out doing just that - buying the competitor and making the factory unusable.
    A similar thing happened in the railway world, where two state owned railway companies colluded to have used rail cars scrapped so that their privately owned competitors can't buy them: <a href="https://www.railway-technology.com/news/ec-cd-obb-antitrust-concerns" rel="nofollow">https://www.railway-technology.com/news/ec-cd-obb-antitrust-...
    mcmcmc · 1790891040 · focus · HN ↗
    Selling below market price != selling below cost, which is a prerequisite for it to be anticompetitive
  2. thayne · 1790872066 · focus · HN ↗
    Not exactly, I think it's saying that Micron would be better off increasing supply themselves (and thus lowering prices) than waiting for a competitor to come and provide more supply to meet the higher demand.
    If there was enough existing competition, that might be the right move, because if they don't increase capacity, a competitor probably would in order to gain more market share. But I think the barrier of entry for making RAM is high enough that Micron can probably get away with keeping supply low (and thus prices high) for at least a few years before a new competitor appears. Assuming demand stays high that long.
    tzs · 1790872887 · focus · HN ↗
    They aren't keeping supply low.
    They have two massive DRAM fabs (56000 m^2 cleanroom size each) that they started construction on in 2022 and 2023 in Idaho, with production starting in 2027 and 2028.
    zamalek · 1790880653 · focus · HN ↗
    Which are exactly the two years they are threatening tighter supply.
    guelo · 1790881844 · focus · HN ↗
    He's not threatening. Demand is exploding and supply just can't keep up.
    jazzyjackson · 1790882255 · focus · HN ↗
    Production starts != maxing out capacity of the fab
    tzs · 1790887249 · focus · HN ↗
    He's "threatening" tighter supply the same way a weather forecaster "threatens" heavy rain.
    fakedang · 1790880890 · focus · HN ↗
    The point they were stating was that if they kept up the high prices, that leaves room for a low priced competitor, likely from China, to occupy the lower end (and larger) share of the market. Like what BYD did to the EV market everywhere except the US. Or what Chinese mobiles did to the smartphone market. Eventually they become so powerful that they start going upmarket, trying to catch everyone in the higher end segments too. And by the time the Western companies think they can retaliate, too bad, China's got them by the bollocks on raw material.
    mandevil · 1790884080 · focus · HN ↗
    But the reason that semiconductors are so vulnerable to boom/bust cycles (going back decades) is that takes a very long time to build the fab- you have nothing for years, and then the fab completes and enormous numbers of chips get made. So if you get demand wrong either direction you have problems. Either you flood the market or prices go way up.
    I don't think it is possible to beat the fab construction delays. This isn't about things being slow in the US: TSMC took four years to go from site selection to some production at their Fab 22 plant in Taiwan (it is currently only 60% built out, is my understanding). And TSMC is best in the world at getting frontier (logic) semiconductor fabs built, it took them slightly longer (five years) for Fab 21 in Arizona. Logic fabs are not the same as memory fabs, but they are close enough to be a good comparison for timeline.
    Basically, unless you started fab construction (specifically to make memory chips) in 2023 you cannot change production for 2027 and 2028. The only thing that will affect prices between now and 2028 is demand, production can't go up because the fabs to make those chips don't exist. If you started now you might get memory chips in 2031, and can you bet 40 billion dollars that the demand will still be there? (A current generation logic fab costs about 20 billion. By 2031 a new frontier logic fab will cost about 40 billion). I don't have prices for a current memory fab, but as I understand it they are comparable.)
    locknitpicker · 1790915891 · focus · HN ↗
    > (...) that takes a very long time to build the fab- you have nothing for years, and then the fab completes and enormous numbers of chips get made. So if you get demand wrong either direction you have problems. Either you flood the market or prices go way up.
    The problem is that if you do not expand your output, others will. When that happens, you will gain a competitor. Then when the crunch happens, your competitor may survive but you may not.
    Therefore, if you do not increase output to meet demand them you might very well be signing the end of your company.
    EA-3167 · 1790920888 · focus · HN ↗
    You’re missing their point: by the time competition “catches up” and starts to compete the odds are that demand will have shifted.
    locknitpicker · 1790940495 · focus · HN ↗
    > You’re missing their point: by the time competition “catches up” and starts to compete the odds are that demand will have shifted.
    That's besides the point, because demand shifter for everyone in the market. You included.
    So your inability to supply that demand resulted in you creating the conditions for competition to show up, and that competition can very likely outcompete you out of the market.
    phil21 · 1790949039 · focus · HN ↗
    > So your inability to supply that demand resulted in you creating the conditions for competition to show up, and that competition can very likely outcompete you out of the market.
    Doubtful. Your competition started building out additional production roughly when you did. Lets say you got a 1 year head start on shovels in the ground.
    Those competitors have decades of experience producing RAM. You do not. Even if you get your facility on-line to first wafer a year earlier than the incumbents, it's unlikely you will beat them to full production output as even extremely experienced operators take 6-18mo to get a fab from first production to expected nominal output.
    The only way to "win" this is to have started before the supply crunch happened back in 2021 or 2022 - or more likely much earlier. Like CXMT did.
    If you were able to find a bunch of investors to give you $40-50B today, already had a site ready to start construction literally tomorrow, by the time you are on-line you will be competing with new capacity currently being built by Samsung, Micron, and SK Hynix - not to mention CXMT. The only way you will be profitable is if the current demand exists through 2031 and beyond.
    I know I certainly wouldn't be investing in such a project, since the entire bet is that RAM prices 5 years from now will still be at roughly what they are today. Which is simply a bet that the current AI bubble and infrastructure build-out is still ongoing.
    fakedang · 1790950358 · focus · HN ↗
    You wouldn't be investing, because you're looking at ROI, while China will be, because they're looking at autarkic self-sufficiency.
    mandevil · 1790923972 · focus · HN ↗
    Fortunately for those companies, they understand this and are taking steps to address the shortage. It's just that the physical reality of our universe prevents any production increase for the next two or so years. Let's say you start a fab today. By the time it gets online, and is able to produce commercial quantities of RAM- let's say you get lucky and it's 2030- you will be competing against at least two brand new fabs from Micron, at least three more brand new ones from SK Hynix, and I'm not even sure how many from Samsung. By the time your new fab is online there will be much more production from all of the existing players who have already mastered the process of producing RAM and so will have an advantage over you, who is learning. The supply crunch is entirely short term, for which there are no fixes in a universe where the laws of causality apply. The only solution to the immediate supply crunch is to have started building a new memory fab back in 2021 or 2022.
    mcmcmc · 1790890965 · focus · HN ↗
    Lowering their prices would result in supply running out sooner. Their competitors would still get the same bite at the apple but would have a longer window where they are the only option. Or resellers would just arbitrage the surplus left on the table.
    m4rtink · 1790925179 · focus · HN ↗
    Its not about lowering their prices - they shouldn't have abandoned their regular long term customers (e.g. normal people) to just chase AI fever drem money bullshit.
    They would still make a lot of money but without making a lot of bad blood & making a massive opening for chinese competition.
    But greed is greed...
    m4rtink · 1790950715 · focus · HN ↗
    "Sorry, we will stop selling food for the next 3 years - but worry not, those few cannibals that survive till 2029 will have the best & most affordable food from our brand new factory that we are building!"
    GeekyBear · 1790908736 · focus · HN ↗
    > I think it's saying that Micron would be better off increasing supply themselves (and thus lowering prices) than waiting for a competitor to come and provide more supply to meet the higher demand.
    It's a bit too late. Chinese manufacturers have finally started making DDR5 and have raised enough cash in an IPO to start ramping up production in a major way.
    > Shares of chipmaker Changxin Technology Group soared nearly 466% Monday in their debut on Shanghai’s tech-heavy STAR Market, making CXMT the most valuable China-listed company.
    The Hefei-based firm had raised 57.92 billion yuan ($8.6 billion) after pricing its IPO at 8.66 yuan per share, making it Asia’s biggest so far this year.
    <a href="https://www.cnbc.com/2026/07/27/cxmt-china-market-debut-chipmaker-ipo.html" rel="nofollow">https://www.cnbc.com/2026/07/27/cxmt-china-market-debut-chip...
    HWR_14 · 1790909612 · focus · HN ↗
    It costs massive amounts (billions) for Micron to build the factories to increase production and would take years.
  3. deadbunny · 1790872387 · focus · HN ↗
    > Such collusion might well be a violation of anti-trust law
    The Memory cartel do not care about silly things like laws
  4. idiotsecant · 1790874701 · focus · HN ↗
    Yes, one of those markets with infinite demand where supply has no impact on price. Those ones.
    bigbadfeline · 1790886106 · focus · HN ↗
    > Yes, one of those markets with infinite demand where supply has no impact on price. Those ones.
    In economics, "demand" doesn't mean "I want this", it means paid, funded demand. 100s of millions of "free" LLM users aren't funded demand, they're subsidized. This leads to front-running and scalping the silicon market at an unreal scale, it also monopolizes access to silicon and compute. Nothing happens by chance here.
    m4rtink · 1790926131 · focus · HN ↗
    Yeah, there once was an insatiable demand for pick axes, mining supplies, saloons and "related services" - until one day it was not.
    Eventually we got the same ghost town after this AI bubble madness.
  5. hnav · 1790877725 · focus · HN ↗
    Does 87% gross margins sound like that them lowering prices is tantamount to dumping?
  6. cyanydeez · 1790878507 · focus · HN ↗
    It also ignores the giant CAPEX and OPEX required for any competition. This isn't banana stands or book publishing, or whatever.
    These are billion dollar+ funded operations that take multi-years just to see if you can compete at the levels required.
    All these comments show up every time, like there's a memory faerie land where you just put on your memory faerie hat and walla! Memory!
    So bizarre.
    kylestanfield · 1790883005 · focus · HN ↗
    Everything is a conspiracy. The elites refuse to wave their increase-manufacturing-capacity-instantly wands.
    cyanydeez · 1790888160 · focus · HN ↗
    I mean, we can assume the people who make the memory love getting huge prices for it. But beyond that, I just dont see why someone who invest several multi billion dollars to squeeze into a potential window that may or may not last 3 years. Especially with how volatile the whole AI bubble is.
    bigbadfeline · 1790889932 · focus · HN ↗
    > Especially with how volatile the whole AI bubble is.
    There's nothing volatile about the AI bubble, it's been going on for a while regardless of cost and that will continue because of politics - which is rather transparent.
    > I just don't see why someone who invest several multi billion dollars to squeeze into a potential window that may or may not last 3 years.
    Interesting, Chinese companies don't seem to know this, they're investing bigly in RAM and other silicon despite being sanctioned and tariffed up the wazoo. Should we tell them that it's a crunch for no more that 3 years so they don't waste themselves for nothing?
    The more interesting question is why Chinese RAM is hugely tariffed, if not for preserving the crunch and its monopoly pricing?
    > I mean, we can assume the people who make the memory love getting huge prices for it.
    Your mistake is to think of the RAM makers instead of the systemic reasons for the problem, these would have to include tariffs, sanctions, subsidies, etc that drive market pricing, RAM manufacturers and their potential competitors.
    rx342q · 1790892337 · focus · HN ↗
    > Interesting, Chinese companies don't seem to know this, they're investing bigly in RAM and other silicon despite being sanctioned and tariffed up the wazoo.
    It's also possible they're preparing for the possibility that they get cut-off and so profit is not the primary motivation. As you mention, they're already sanctioned...
    Also, CMXT started in 2016 so that gives some indication of the timelines involved. Even in Taiwan it's like a year and a half just to get the building made and these are experts operating in their own country working 24/7. That timelines doesn't include equipment into it, which is also in shortage, and getting lines qualified.
    <a href="https://www.tomshardware.com/tech-industry/building-a-chipmaking-fab-in-the-us-costs-twice-as-much-takes-twice-as-long-as-in-taiwan" rel="nofollow">https://www.tomshardware.com/tech-industry/building-a-chipma...
    cyanydeez · 1790901860 · focus · HN ↗
    they've been basically building their own PC universe. They are not specifically trying to compete with America. They're trying to disown any reliance on America.
    While Trump and Business minds of America focus on pumping and dumping our stock market, they're 10 to 20 years out on what they want.
    It's fucking myopic to think China cares two shits about America.
    cyanydeez · 1790901771 · focus · HN ↗
    Oracle just sent a force majeur to their data center in texas essentially telling them they can't expect to get paid for several years...
    And you're trying to say someone should go out and invest 5 years, multiple billions in investment to catch up to today memory prices?
    You arn't paying attention.
    bigbadfeline · 1790909406 · focus · HN ↗
    > Oracle just sent a force majeur to their data center in texas essentially telling them they can't expect to get paid for several years...
    Is this what you're talking about:
    "Oracle has issued a force majeure notice regarding its New Mexico AI data center project, known as Project Jupiter. This legal move is intended to allow Oracle to delay payments if the project does not meet its expected completion date in 2028."
    This has nothing to do with memory prices and everything to do with too much cash chasing too few physical goods used in construction and power generation, which is a systemic problem upstream of RAM overpricing.
    > And you're trying to say someone should go out and invest 5 years
    Did I say that? Where? I talked about Chinese silicon makers who work in a very different system. As to why we have a monopolized market, check [1].
    > You arn't paying attention.
    Attention is all you need - not me though, I've got enough of it. Check again the last paragraph of my previous comment to understand why.
    [1] <a href="https://news.ycombinator.com/item?id=49927315">https://news.ycombinator.com/item?id=49927315
  7. CodeWriter23 · 1790882065 · focus · HN ↗
    Micron started as the outsider busting in during a past RAM crunch. They more than any manufacturer should understand this.
  8. ashkankiani · 1790884258 · focus · HN ↗
    Are you seriously not aware of the existing history of the memory cartel? <a href="https://en.wikipedia.org/wiki/DRAM_industry_price_fixing" rel="nofollow">https://en.wikipedia.org/wiki/DRAM_industry_price_fixing
    zacharycohn · 1790885815 · focus · HN ↗
    There are nicer ways to phrase that.
    ashkankiani · 1790887540 · focus · HN ↗
    I think misleading people using confident language about an issue you don't understand is more unkind.
    Also I was truly asking if they weren't aware in disbelief, since I assumed it was common knowledge.
    NamlchakKhandro · 1790889438 · focus · HN ↗
    Why
  9. BobbyTables2 · 1790907899 · focus · HN ↗
    Does it really count when they’re big enough to impact the market price?
    Staying in the consumer market would have lowered the market price.
  10. maerF0x0 · 1790950318 · focus · HN ↗
    > Crucial
    I mean they did stop selling to consumers
  11. KellyCriterion · 1790971490 · focus · HN ↗
    >Such collusion might well be a violation of anti-trust law, but in any case, it wouldn't work <
    Ah, sorry, _not_ charging the highest price you could get at a market should be an antitrust case?
    Absolutely no chance. You cant force a company to optimize for its so called (in economics) >producer surplus<.
    How should this work? Minimum price control by gov?

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