Oh,
that'll be $800. >> What? That can't be right. What do you
mean $800? >> Yep. That's probably how I felt for
anyone who's fired up the old PC part picker over the last couple of months.
But why, though? Well, part of it is the obvious one. I'm sure by now you must
have seen the countless headlines about AI data centers and their insatiable
demands for energy and water and yes,
computer memory. And they're using their fire hose of investment capital to buy
up so much memory that one of the big three memory makers just said, "Mother
the big three, It's just big me."
and then completely sunsetted their entire consumer line outright in an
effort to focus on this sky-high AI demand. Separately, SKH Highix announced
that they are sold out of production all the way through 2026 and Samsung just
increased their contract pricing by
100%. This means that if the AI bubble doesn't pop, this is going to get worse
before it gets better. >> But like, can't they just make more
memory chips or build more factories? Couldn't they just download more RAM? I
mean, yeah, they could do those things, but I hate to break it to you guys,
there's actually a lot of reasons for them not to do that. Just like I'm not
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To explain why RAM costs a small nation's GDP now, we first need a quick
and dirty explainer for why AI models such as ChatGBT, Deep Seek, and Gemini
are so darn thirsty for it. LLMs or large language models are trained by
feeding them buckets of media files, often text, images, video, or audio, or
depending on the model, sometimes a combination. And in the current ARMS
race, the highest quality models depend on parsing through the largest buckets
of training data. This training process can take anywhere from a few hours to
months for the largest models. And that's where RAM comes in because RAM is
so much faster than an SSD with more capacity than the cache on board a CPU.
It's essential, crucial even for large
data centers to get as much as possible to speed up their AI development and
training efforts. It's also useful for inference, the stage where the user
actually interacts with the trained model. For instance, if you have a long
interaction with an AI model, more RAM helps to quickly reference the earlier
context of your conversation in order to appropriately respond to your next
prompt. If you want a deeper dive into this, I'm going to make sure I link some resources down below. But all you really
need for us to continue is more. It just needs more. And companies like OpenAI
are generating billions of dollars in revenue, sorry, funding, which if they
want to stay on the bleeding edge, means they need as much memory as they can
get. But Elijah, isn't a ton of that memory being installed on AI GPUs or
even memory sticks that are for servers? Why is my Gamer Deluxe RGB 360 nocope
kit also getting expensive? Here's the thing. While your favorite PC parts
retailer might carry RAM from dozens of different manufacturers, most of them
only assemble modules, the sticks that actually go into the slots. For the
little black squares, the actual chips that contain the DRAM dies, there are
really only three serious players right now. SKHix, Samsung, and Micron. These
giants own the multi-billion dollar fabs that produce those chips and use them to
supply functionally every single industry on Earth. If it has a
processor, it probably needs a little bit of DRAM. So, yes, server sticks are
separate from your gaming sticks, but at the end of the day, whether you're a typical gamer or an AI company, you're
both competing, or more like bidding, on
the finite quantity of these chips that can be produced by the big three. And I
wonder who can afford to bid more, the individual who wants to play video games
or the multi-trillion dollar corporation with no revenue whose stock price will
cater if they don't buy more than anyone else in an effort to maintain their
tenuous lead. So, if you take off your angry consumer
hat and put on your business monster hat for even a second, it's pretty easy to
understand why Micron decided to pivot their internal resources toward
fulfilling demand for their hungriest, wealthiest customers. Sucks cuz Crucial
was a really good source of quality RAM and SSDs [music]
at a decent price. But it's really not the end of the world. Samsung has zero
presence in their DIY enthusiast space either, but that doesn't prevent module
makers like Kingston or Corsair potentially pivoting and buying chips
from them and building sticks for gamers. Speaking of Samsung, a rumor
recently started that supply was so constrained that they couldn't supply
their own smartphone business unit with
RAM chips. Samsung has come out and said that that isn't true. But for it to be
even a concern for the industry does raise a question. Why don't they just
make more? Well, for a couple reasons.
First, as I've alluded to before, the current fabs that are used to make
cuttingedge chips have a finite capacity. They already run around the
clock with some of the world's most finely tuned supply management and
highly trained engineers overseeing their operation. It's not as simple as
just adding a production shift or turning the machine up to 200%. Those
are delicate operations and if something goes wrong in the middle of a batch, it
could be weeks or even months to build
it again from scratch. So, they're not going to change things all willy-nilly.
And second is that even if they could boost production to meet demand, both
SKH and Samsung have publicly stated
they don't plan to because they don't want to. See, this isn't the first time
DRAM demand has spiked. There was a big one back in the mid2010s when affordable
cell phone plans went online in India as well as just a more general surge in
demand for mobile computing devices. Anyway, in the past, DRAM manufacturers
have boosted production to meet these spikes in demand. Spikes that eventually
subsided, leading to an overstock. You see, the same factors that make it hard
to ramp up production at a moment's notice also make it kind of challenging
to slow it down at a moment's notice. That can be good for consumers since
that means cheap gaming memory, but corporate fat cats kind of hate that,
especially when it leads to them selling memory at cost or sometimes even below
cost. The third reason is closely related to the first and second. [music]
Building a fabrication facility for anything silicon wafer production,
whether it's CPUs, GPUs, or RAM, takes
literal years. And these aren't the kind of projects where you can just throw
twice as much money at them to complete them in half the time. On top of the
building itself, plans need to be in place for seismic activity mitigation,
water access and management, power staffing, logistics, good old-fashioned
supply of the chemicals, gases, and high purity silicon wafers you'll need. And
even if one of these big boys does decide to shell out for another
state-of-the-art fab, they would obviously want a return on their investment. So, they would only do it if
they expect these prices to stay high enough for them to operate it profitably
for the next couple years. [music] And I'm going to let you in on a little open
secret. That's not going to happen. The AI bubble is going to pop. Maybe not
today, maybe not tomorrow, but soon and for the rest of your life. When it
happens, demand for memory isn't going to go away, just like demand for new
smartphones didn't go away. But it won't stay at this level. And there is no
shovel manufacturer on Earth that is going to build a several billion dollar
factory that might not be needed by the time it's completed. So, it just seems
that it's all the
where the is that coming from? >> From across the Pacific Ocean, Elijah,
where I've just learned that uh China
will save us from expensive memory.
Well, maybe. Regardless of your
political views on China and their technology, CXMT, a relatively new chip
fab that was born and raised in the 100 Acre Wood, has just announced that they
now have the ability to manufacture DDR5 chips. Great news for folks in China,
although maybe not as much for Americans, unless the US and China can
sort out their little trade kurfuffle. With all that said, according to some
reports, CXMT is still about 2 to 3
years from reaching the kind of manufacturing output that the big three
have. So, it remains to be seen whether they'll be able to make a dent in the
current demand anyway, which really sucks because, as I alluded to before,
this is probably going to get much worse before it gets better. [music]
Remember that bit about how SKHEX has sold through their 2026 production? What
that means is that even if the bubble pops, okay, all those chips are booked
and SKHENX is going to do their darnest to make sure that whoever booked them
buys them. So if a company like Kingston were to place an order for chips, it's
going to be at those current market or bidded prices. And they're not going to
sell them to you for the old price just because you're a poor consumer who just
wants a decent price on memory. They're still gonna want to get the money back
from paying more for those RAM chips. So,
years then back to you, Elijah.
Which means not only are RAM dims going to be more expensive, but everything
that needs memory will be. iPhones, Steam machines, smartwatches, cars, and
so so much more. [sighs] So, with all of
that said, what should you do as a [music] consumer? To be honest, I don't
know. Micron and OpenAI make for convenient scapegoats for lining the
pockets of corporate billionaires and politicians and leaving us to struggle
both now and when the AI bubble pops.
But the flip side is they are just some of the players. And as far as I can
tell, everyone is complicit. And if I'm mad at everyone, I don't know what to
do. Boycott everyone that makes RAM. Then what? What videos will we make
about products with no RAM in them? What video games are we going to play? I did
find out some good news though that I'm going to tell you. The Ebola outbreak
that is happening in the Congo has just been declared over. I mean, I didn't say
the good news was going to be about the RAM crisis, but hey, maybe this will be
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December 16th, so if the Ebola outbreak starts again, my information is
outdated. But if you guys enjoyed this video, maybe go check back on the video
where we talked about tariffs when they were introduced. We talked a little bit
how TSMC is actually struggling to hire for their American-based Arizona plant.