The AI boom disrupted the memory market
AI demand is driving up memory prices, and the crash could be severe.
1The AI boom transformed the memory market
The artificial intelligence (AI) boom has upended the fundamental rules of the memory market. Prices that should be falling are skyrocketing, and this trend is expected to continue until 2028. The memory market had a predictable cycle for decades, but AI demand has shattered it.
2AI memory demand is driving up prices
GPU servers require vast amounts of high-bandwidth DDR5 and NAND memory. This demand has consumed all available supply. As a result, the cost of consumer electronics is rising, and the production of budget smartphones is becoming increasingly difficult.
3Big gains for manufacturers
Memory manufacturers like SK Hynix and Micron have tripled their revenues in just one year. Samsung has roughly doubled its income. The AI demand is generating significant financial gains for these companies.
4Massive investments in new factories
The solution to the problem lies in building more factories. South Korean President Lee Jae Myung announced a $576 billion investment plan led by SK Hynix and Samsung. Micron also plans to spend $3 billion to strengthen its US supply chain.
5Factories will take time to reach full capacity
Building a new memory fab is one of the most challenging tasks in the industry. From permits to ultra-pure water systems and lithography tools that take months to calibrate, there are numerous hurdles. A fab started today will take at least three years to reach full capacity.
6The race against the AI bubble
The real race isn't about memory demand but whether new fabs can reach full capacity before the AI bubble bursts. If AI demand declines as new fabs come online, manufacturers could face an inevitable crash.
Original article: The Next Web — AI patlaması bellek piyasasını alt üst etti