What caused the glut was Samsung's massive expansion in the early 2010's. Samsung was trying to increase market share in DRAM and they pumped in billions in CAPEX to increase their manufacturing capacity. That not surprisingly drove down the prices of DRAM between late 2014 and 2016, which benefited consumers, but also huge loss for all DRAM makers. This also meant that they couldn't invest much into their future capacity which is why we have the kind of price surge that we now have. This is no brainer if you look at it as business cycle. It looks like all DRAM makers are increasing their output now, but probably not enough to bring down the price fast enough, as it takes years to ramp up production.

> Samsung was trying to increase market share in DRAM and they pumped in billions in CAPEX to increase their manufacturing capacity.

That's exactly how it's supposed to work. Every manufacturer is individually incentivized to increase supply to increase their own relative share of the market.

Of course, it's collectively better for all of them to choke supply, which is how we get OPEC and the DRAM cartel.

China's got a big electronics industry that needs DRAM for their products, so if Korea is going to choke supply then they're just going to start up their own fabs. And predictably, the DRAM cartel is now crying about the new kid on the block messing up their attempt to corner the market.

> It looks like all DRAM makers are increasing their output now, but probably not enough to bring down the price fast enough, as it takes years to ramp up production.

No, actually, they are contracting supply relative to projected demand. Demand is going up by 20.6%, supply is only going up by 5-7%.

https://press.trendforce.com/press/20170920-2972.html

> This also meant that they couldn't invest much into their future capacity which is why we have the kind of price surge that we now have. This is no brainer if you look at it from business cycle point of view.

Pretty sure they cut capex in 2016, which wouldn't have had an impact until like, this year. Are you saying that they cut capex and in a matter of months prices doubled? Yeah, doesn't seem correct to me.

> Was it Cartels intend to drive the price so low that they would be almost out of business too?

Samsung was "almost going out of business"? Bull fucking shit.

Actual, literal, "won't someone think of the poor corporations just struggling to make ends meet". Just wow.

Hynix, Samsung, and Micron are making bank.

>Meanwhile, Hynix, Samsung, and Micron are all planning to reduce capacity relative to projected growth of demand

Unless you have evidence to support this, all the company above you listed has have expansion capacity planned and made during the last two years.

>That's exactly how it's supposed to work. Every manufacturer is individually incentivized to increase supply to increase their own relative share of the market.

And they are. Yes, there may be a cartel going on. But it is a simple fact demand is outstripping supply. And no memory maker are willing to invest money into building fabs. Because building a new Fabs along with leading node is increasingly expensive. Moore's law didn't just ended for CPU, it is for all semiconductor companies. All current Memory makers has roadmap that will add 30% plus bit capacity to NAND without even making a new Fab with 3D NAND. GDDR Memory is also in complete shortage, and was blamed multiple times where GPU maker cant ship as much as they could, not that Nvidia and AMD could built them fast enough with TSMC anyway. TSMC has stated they have a whole dedicated fab for customer making their own Bitcoin ASIC, ( And has since confirmed as BitMine ), no GPU maker can make a prediction of how and when the Crypto craze ends, how are memory makers suppose to plan for their GDDR production capacity other then being conservative about it. And Nvidia now are getting problem of having high volume of GPU sitting in channel after BitCoin and Crypto crash.

Then there is the machine learning, AI craze, Datacenter segment seems to be growing with no limit. As shown outpacing Intel's projection quarter after quarter.

With Fab investment continue to increase, and takes longer to recoup, do you expect any sane company to take risk into building new Fab? When you know somewhere in the back of your head these craziness may not be sustainable?

The evidence is in the link that was given

>annual global DRAM bit demand for 2018 will grow by a larger margin of 20.6%.

>the plans from the top three suppliers indicate that their respective wafer start volumes will expand by only 5% to 7% annually in 2018

That is not contracting their supply. Contracting their supply would mean taking fans offline. They are still increasing their supply!

Maybe it isn’t possible to built that much extra capacity. Maybe there isn’t the necessary budget/capital for that level of expansion? Maybe 5% is a sustainable rate of growth (and their supply chain), but 20% isn’t? There are lots of other factors at play here.

Contracting ‘relative to demand’ is a really disingenuous way to frame the argument.

Exactly. You don't need to be in DRAM / NAND or SemiConductor Industry, any industry are the same in their "projected" demand. There are always the intention they over project it, especially to those analysts reporting those figures, it is in their best interest to have DRAM / NAND maker to expand their capacity while they get much lower price.

Then there is the maths of 20% increase in "bits".

You see you don't need to build new fab to have increase in "bits" capacity. 3D NAND, 3D DRAM, EUV DRAM which Samsung is working on. Sub 10nm Node which Samsung / Micron are also working on and coming soon. All of these will increase their "bits" capacity without substantial investment. And as DDR5 standardise with larger maximum capacity per bank, better yield and leading node, and an expected increase of "bits" capacity by 50%+ in the next 3 years. Who will be there to say we will sell 50% more in 3 years time? Especially when Mobile sales are already slowing.

There is the China question. Before any media coverage started in late 2017 and 2018. China had always have plan to have their own DRAM and NAND Fab, with government money started pouring in 2015. That is, in the worst possible situation, assuming China somehow suddenly understand how to make DDR4, LPDDR4, what is there to stop them the race to bottom, and their massive influx of cash to build out new Fabs to bring huge capacity into the industry. Are you really willing to burn your own money, in the tens of billions against a nation?

Look at what happen to Steel, Solar Panel, etc The only difference is making DRAM is a lot harder then those two. I specifically leave out NAND here because 3D NAND are even harder for them to understand and grasp.

And I too, wanted cheaper DRAM and NAND. And I know in the old Cartel working, where they actually "reduce" capacity and hold price together via talks. But right now, I think the market dynamics is that they don't need to do any of these tricks to get what they wanted.

> No, actually, they are contracting supply relative to projected demand. Demand is going up by 20.6%, supply is only going up by 5-7%.

The semiconductor industry is well know for the boom/bust cycle. It seems like folks are trying to manage investment and keep expansion to a sustainable level this time.

Sure, Samsung was nowhere close to going out of business -- too big too fail? too much cash to fail? In fact Samsung had enough cash stashed away to weather the whole crisis and the company did continue investing through the trough.

> Of course, it's collectively better for all of them to choke supply, which is how we get OPEC and the DRAM cartel.

If it is a legitimate patent, it is supposed to allow them to choke supply.

On the other hand, I want to see affordable RAM before I'm 60, so I don't care.

Patent law is fucked up at the moment. 28 years is far too long. Should we fix it the right way, yeah, but that's not going to happen, so given the choice between not having any RAM for 30 years or letting China fight it for me, I'm definitely going to not care if China flouts patent law. The system obviously doesn't work well so who cares?

Reminder: America was literally founded on ripped-off British patents (let's start with the cotton mill, among others). Developing country steals patents from developed country, film at 11. Now we are the developed country.

Now you throw in the fact that you've got cartel behavior from 3 companies who have near-complete control over the supply... and I'm supposed to cry for Micron here? Trust me, they'll be fine. Maybe they should push their capex back up instead of collecting rents (which is definitionally what a patent does).