The PC components market is in a severe shortage – it will likely be for quite some time. PC Gamer Portal speakWhat causes RAM prices to increase sharply and how it affects other computer components, from video cards to SSD drives.
What is causing the shortage and what does AI have to do with it?
The main reason for the severe shortage of memory and storage is the unprecedented investment in AI. OpenAI's Stargate project plans to invest $500 billion in AI infrastructure in the United States over four years. Nvidia also invested $100 billion in OpenAI, which in turn will buy $300 billion in computing power from Oracle. Data centers are built so quickly that they sometimes have to be set up in tents.
AI hosting servers require huge amounts of storage and memory, and processors need to access stored data very quickly. To train AI and operate logic algorithms, huge amounts of information are used, not to mention repetitive training, which often lasts forever. Typically, this data is unstructured, forcing the AI to pull information from different regions of the drive as it trains and builds the neural network.
SSDs are ideal for this purpose; and on the RAM side, AI companies are looking for high-bandwidth dies. For context, this is not the same DDR memory as in gaming PCs, but the DRAM memory chips themselves are identical. Buying large quantities of HBM memory means there is less DRAM on the market to produce conventional memory cards, and this leads to higher prices.
Why does memory loss affect working memory?
RAM is the most vulnerable type of computer hardware. DRAM memory, which is being actively acquired by AI companies, is produced at the same enterprises and memory production lines for RAM dies. Furthermore, this applies not only to the latest DDR5 standard, but also to DDR4.
DDR4 production is being phased out, which means fewer old dies will be sold, although this factor in itself is unlikely to lead to skyrocketing prices. The increase in DDR4 die prices is a sign that manufacturers do not have enough products to meet industry demand. Therefore, companies try to buy whatever resources they can get.
Why does memory shortage affect SSDs?
Flash NAND will also be affected because it is a component of long-term SSD storage. Even if the SSDs in AI servers are not the same as those for gaming PCs, NAND production for these server drives will impact consumer SSDs if supplies run out.
Typically, AI servers use higher quality SSDs than consumer SSDs, with different NAND, but if there is a shortage, server buyers may start purchasing consumer options.
So far, flash memory prices haven't gone as high as RAM, but this could be just a matter of time. Adata has announced that supplies of DRAM, NAND, and even conventional hard drives are in short supply for the first time in 30 years. Many of the best SSDs for gaming are still quite cheap, but it's likely that scarcity will soon start to change the consumer market as well. Like what happened with RAM.
In fact, the first hints of the development of such events have already appeared. Trendforce found that cloud service providers are being forced to switch to SSDs with 4-bit memory cells – similar to the SSDs found in many consumer PCs and laptops. The move is partly due to a shortage of secondary HDDs designed to store infrequently accessed information. In other words, the shortage is affecting even traditional hard drives. Western Digital has increased the prices of all its hard drives.
Why does lack of memory affect the GPU?
The GPU may look like a product without RAM and SSD, but then again, there are rumors that the shortage could affect them as well.
Memory data centers need AI differently than the memory inside graphics cards, but memory manufacturers will likely shift their resources to memory first as demand increases. Thus, memory production for GPUs will certainly slow down, leading to higher prices. And the more expensive the memory for the video card, the more expensive the video card itself.
Recently, there were rumors that AMD would increase the prices of its own GPUs for this reason; Price tags said to be available to industry customers have been updated.
Why memory shortages affect gaming PCs
Pre-built gaming PCs naturally need memory, so the pre-built PC market is not far from a crisis – it is about to experience a domino effect. Sooner or later, assemblers and manufacturers will run out of memory inventory, purchased before prices rise, and they will have to order new dies. And the burden of these costs will of course be borne by the buyer.
What will happen in the future?
Memory and storage manufacturers are unlikely to create more supply than market demand. To begin with, the thing to remember is that in case of a sharp drop in demand, companies will lose a lot of money. In addition, implementing new semiconductor production lines or expanding existing lines is a complex undertaking and takes years.
Of course, there is a possibility that the AI industry will burst like a bubble. Some experts believe that investment in this sector significantly outweighs returns; For now, the AI segment of the IT market is being pumped with money in the hope that it will one day recoup its development costs. This is why so much money essentially moves between the same companies. Nvidia invests in OpenAI, which buys hardware from Nvidia. The result is a cyclical system that continually absorbs money without any significant returns, which inflates the metaphorical bubble.
But it's important to understand that while the financial bubbles of 2000 and 2008 were disasters, they also laid the foundation for something bigger. Likewise, the bursting of the AI bubble could sow the seeds for a less bloated industry.
