As the stock prices of various tech firms plummet off a proverbial cliff edge, there’s a palpable sense of celebration rippling through PC hardware enthusiast circles. Companies such as Nvidia and AMD might make our beloved core hardware, but we’ve all watched the cost of RAM, GPUs, and SSDs become absolutely absurd over the last 12 months, as these tech giants chased the AI juggernaut’s promise of bumper profits. Schadenfreude is rife on social media and Reddit right now.
I’m sorry to be the bearer or bad news, but even if this is the pin that pricks the bubble (stock prices went up and and down like a yoyo even as I was writing this piece), PC RAM isn’t suddenly going to become affordable any time soon. Retailers aren’t going to be flooded by DDR5 memory sticks and gaming graphics cards that have to be sold at 2024 prices to get them shifted. The reason is simple – they largely don’t exist any more.
Even if this is the pin that pricks the bubble, PC RAM isn’t suddenly going to become affordable soon.
Unlike previous hardware pricing crises, this situation isn’t the result of a booming demand for desktop PC hardware, as we saw in the crypto mining boom. It doesn’t stem from eBay scalpers hoovering up all the stock with bots as soon as it appears on retailers’ websites. Instead, it’s a complete transformation in the silicon fabrication industry, particularly involving memory, that’s to blame.
AI data centres haven’t been buying up all the DDR5 memory we want to put in our motherboards, or the GDDR7 VRAM that could go into our graphics cards. Instead, they’ve been buying high-bandwidth memory (HBM), to the point where makers of memory chips have had to change the way they work. In fact, Micron, which used to run the popular Crucial brand, doesn’t even make consumer memory at all now.
SK Hynix, Samsung, and Micron, have largely shut down most of their fabrication facilities for DDR5, DDR4, and traditional graphics card memory, and instead pivoted their production capacity towards churning out HBM on a massive scale. If the AI boom suddenly crawls to a halt, there may end up being a surplus of HBM, but you can’t put that in a desktop motherboard, or on a current-gen gaming graphics card for that matter. These firms can’t just restart the DDR5 machinery either – it barely exists at these plants anymore.
Making desktop PC memory on a large scale again, to the point where it’s affordable, will require a massive turnaround in the allocation of manufacturing resources, and that takes time. I spoke to memory consultant Ben Miles about this earlier in the year, and he gave me an idea of the timeframe.
“It takes two-to-three months to reconfigure your factory to switch to making one type of RAM from another,” he told me. “So even if they [RAM makers] were to say, ‘Oh, there’s been an AI decommit, let’s start stamping out consumer and enterprise memory again,’ it’ll still take three months for just one factory to do it. That’s the kind of lag time we’ll be looking at across the industry.”
Building more factories will take even longer. “If you say, ‘I want to build a memory foundry, and I’ve got planning permission, and I’ve got a contractor, and I’ve got space in the ground,’ it still takes years to get that built,” Miles says. In short, we’re talking about at least three months for a memory fab to pivot from HBM to DDR5, or years to build new fabs.
Plus, after that, you need to wait for all that new RAM to filter through to module makers, get stamped onto DIMMs, before shipping out to distributors, then retailers. Even at that point, there’s a huge crowd of consumers waiting to sweep it up, which will keep prices high.
Whether this is the start of a market correction is also a big question, and I’m not silly enough to make any predictions here. What I will say is that the outlandish growth of the AI market has had all the hallmarks of a bubble that, in a normal world, would be anything but sustainable long term. These are unprecedented times, though, as Apple’s new manufacturing bill shows. The AI industry has a hell of a lot of money propping it up, plus there’s clearly huge demand for AI, even if people don’t want to live next to data centres.
I’d love to see a return to normality in PC hardware pricing, but we also need to be realistic. Even if this is the end of the AI rollercoaster, and that’s a very big “if”, it will still be a long time before the shortage in PC memory supply can be properly addressed.
