Technology

Except they’re not ramping up production. On the contrary they’re reducing production in places.

There will be no glut of surplus supply resulting in cheap prices because the hardware companies making the hardware for AI are the only ones actually profiting off the industry and they don’t want to be the ones left holding the bag when the bubble bursts.

I think RAM manufacturers over increased production capacity in 2020 and got hurt by that - so maybe the industry will not adjust as flexibly this time for fear of these investments not paying off

The origins of today’s cycle, says Coughlin, go all the way back to the chip supply panic surrounding the COVID-19 pandemic. To avoid supply-chain stumbles and support the rapid shift to remote work, hyperscalers—data-center giants like Amazon, Google, and Microsoft—bought up huge inventories of memory and storage, thus boosting prices, he notes.

But then supply became more regular and data-center expansion fell off in 2022, causing memory and storage prices to plummet. This recession continued into 2023, and even resulted in big memory and storage companies such as Samsung cutting production by 50 percent to try to keep prices from going below the costs of manufacturing, says Coughlin. It was a rare and fairly desperate move, because companies typically have to run plants at full capacity just to earn back their value.

After a recovery began in late 2023, “all the memory and storage companies were very wary of increasing their production capacity again,” says Coughlin. “Thus there was little or no investment in new production capacity in 2024 and through most of 2025.”

https://spectrum.ieee.org/dram-shortage