That's a bit off the mark. Processors, RAM, and flash memory each require their own specialized fabs. TSMC makes processors but not DRAM or NAND flash. Kioxia makes flash only. Samsung has all three types of fabs. Micron does DRAM and NAND, in different fabs.
The increase in SSD prices is not because there are many components competing for the same constrained resources, it's that they are complementary goods being subject to the same dynamics in parallel because the servers that are causing this demand spike need all of those components. Where we do see competition for the same fab capacity is in the mix of DRAM types, where GPUs want HBM, server CPUs want DDR5, laptops and phones (and the occasional server CPU) want LPDDR. And competition among different types of processors for TSMC's fab capacity.
It doesn't change your point that these lines are different and the immediate price spike is not about them competing for capacity in the same facilities, but the fact that manufacturers are committing to large enough future purchases to drive new fab construction means that future pricing outlook (which does impact the current prices to extent) does involve some amount of competition between different types of semiconductor products.
This is a big bet. Look at what happened in 2001 with the dot-com boom. We're still trading on their dark fiber over-build today. Meanwhile any overcapacity built in fabs will quickly be made obsolete by newer and better fab technology (or at least, that's been the pattern for the past 30 years).
I think you're missing the fact that building new supply takes time and sustained commitment, and there's simply nobody in a good position to make that commitment without losing big if your thesis turns out to be wrong.
If the demand for new AI builds is eventually satisfied, or worse, craters overnight, then who will be left holding the bag? It sure won't be Google or Apple, or even NVIDIA - it will be TSMC and Samsung.
But as you mention, this is all temporary. Either you're right, and demand will remain sustained long enough for some of the providers to decide to take that risk, or demand will crater and prices will fall.
The fact that the S&P 500 is near record highs at the same time as consumer confidence is at a 70 year low is not encouraging for continued all steam ahead in my mind... but then it's easy to predict a general future recession, and much harder to predict it to the day.
I doubt consumers will regret these compute purchases in 3 years, my 3 year old GPU is still holding value, actually increased in value, and I use it more now than ever.
I did predict or expect that if oil went to $150 we'd be in recession territory, currently hovering below that level and folks are feeling the squeeze and aren't happy. Things could get worse or better, tough to tell, but I think silicon demand is more or less secular and will do relatively well in a variety of macro conditions.
Bad metaphor. Not being forward enough is a common mistake. When learning, you may want to make yourself _feel_ like you're too far forward. We can commonly think we're too far forward when actually overall we're still too far back. Teaching it is very hard.
Although it is dependent on your style of skis (e.g. carving) and style of skiing (powder, racing, cruising).
For me, it is very rare that I go too far forward (I began with a leant back style and I haven't rectified that after many years of skiing). I try to prioritise fun over ability.
The fact that we _haven't_ seen such deals be made, and that ~50% of new datacenter builds have been quietly cancelled[1], suggests to me that we're dealing with paper demand more than true sustained demand.
1: https://www.tomshardware.com/tech-industry/artificial-intell...
The major companies have been trying to build >$100B of new production capacity in the US for years now. All of these manufacturing facilities have been significantly delayed by NIMBYs using the same "environmental and community concerns" advocacy slop that hinders almost all productive industry in the US.
Blaming the suppliers is a lazy take. They aren't responsible for degrowth activists being able to dictate what we are allowed to build.
By the way, interesting podcast on that topic: https://www.youtube.com/watch?v=mDG_Hx3BSUE
When supply is constrained, widgets to get sold to whoever is willing to pay the most. It’s capitalism, baby. Arguably this is a good thing, because the limited resources are allocated to the people who can create the most value from them. And high prices provide an economic incentive to bring more supply online.
Nvidia is making big profits right now because they don’t have a lot of competition for their fancy AI chips. The prices will come down when they have more competition.
Like, there's so many things that could benefit from a cheap processor involved in their operation, the growth seems effectively unlimited.
The pandemic caused once such boom-bust that resulted in a rather large downturn in demand in 2022-2023 referred to as the pandemic hangover. During that time demand dropped following overspend during the pandemic and members of the cartel drastically cut production at times to keep prices above cost. Even after the demand recovery began in 2023, the cartel members were slow to increase production and made little to no investment in production capacity in 2024-2025. Creating a shortage.
The AI hype cycle has exacerbated the shortage by creating speculative purchases and then panic buying. Remember the shoe company that pivoted to AI?
So Cartel market manipulation is partially to blame for the over 100% increase in prices and the shortages.
The Market™ is perhaps going after higher margins. If you can charge $200 instead of $100 for a widget, why wouldn't you?
Ideally at some point someone will see the margins and be motivated to go after some of it and offer things for $190, but the ROI on upfront fab costs given market risks may not be high enough for the business uncertainly that needs to be taken (boom-bust cycles).
No participant in The Market is obligated to "cater" to demand if they do not think the juice is worth the squeeze.
The reality is all the things we learned from the Great Depression have been forgotten, and half the voting public seems to champion monopolies while simultaneously acting dumbfounded that the end result will always be an increase in costs.
The counter-example I hold up is Harley-Davidson. They could hardly pay a bill in the late '70 through the '80s. They'd even get free samples from suppliers and put them into production. They survived with very strong brand loyalty from customers and after-market companies.
Samsung sells directly to customers of all sizes, so they have a very good idea as to where products end up. Cutting the legs off of innumerable small businesses is despicable behavior.
I don't care if Samsung is literally starving to death, where I was previously at least a marginally loyal customer not even looking at other brands because prices were fine.
NIMBYs and degrowth activists own this particular "market failure". The companies have been trying to invest in capacity ahead of demand but have been prevented from doing so.
I think a lot of people will accept industry when industry tries to be a good steward of the community's environment.
As with the sudden inexplicable "concern" about data center construction, I don't think this activism is organic.
I don't think it is sudden, there was much of the same concern about Amazon warehouses and anything else that cuts down trees, disrupting wildlife, and human neighbors. The reason it is more of a concern with modern datacenters is because they don't come with a significant amount of new jobs for the communities they are affecting. People will put up with a lot if means their unemployed loved ones can get on their feet.
With AI being a looming threat to everyone's livelihood it is compounding the reaction, not only do these datacenters not provide new jobs, they are actively contributing to people losing their current jobs.
If these new datacenters were going into empty buildings in cities that already had adequate infrastructure, then no one would care. They would still be against ai in general, but the datacenters wouldn't be a problem.
edit:
They could probably get a ton of support if they went into one of the many cities with crumbling infrastructure, took over abandoned buildings, and paid to fix up the roads and stuff. Like if they moved into an abandoned factory in flint, and fixed the water supply they could be heros.