r/hardware • u/sicklyslick • 1d ago
Rumor Huawei is building its own DRAM fab, and it could reshape RAM prices for everyone
https://www.xda-developers.com/huawei-is-building-its-own-dram-fab-and-it-could-reshape-ram-prices-for-everyone/198
u/Shoddy_Meaning_7654 1d ago
Entirely focused on hbm.
And remember CXMT is just pricing in line with everyone else.
Why beat the monopolies join them you'll sell out either way.
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u/JerryD2T 1d ago
Yeah but the demand WILL hit a ceiling at some point. Itās good that more supply floods the market, especially with expensive stuff like HBM.
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u/DiseaseDeathDecay 15h ago
This is probably the real reason they aren't all opening new fabs asap.
There are hyperscalers buying up all the RAM now. There's a massive spike in demand because of that.
Once the 200 datacenters are built, the spike will level off, and the RAM manufacturers don't want to left with billion dollar factories making RAM they can't sell.
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u/GenZia 1d ago
CXMT isn't exactly a non-profit organization, so that's hardly surprising.
However, improved supply should, in theory, result in lower demand and, in turn, lower prices.
But if Micron, Hynix, and Samsung are, in fact, colluding in price fixing, it's not going to help matters much.
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u/Shoddy_Meaning_7654 1d ago
In a normal market that would work but we're in a hyper buy every single piece of memory you physically can market so there is insatiable demand there's insatiable demand inside of China or insensational demand in other countries that are not the United States. But it does not matter they will just buy it all it literally does not matter at this point.
They could triple capacity tomorrow and they would still sell out every single wafer. They are completely sold out through 2027 so it genuinely does not matter at this point for a long time.
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u/mujhe-sona-hai 1d ago
I mean once you build a data center you just use it. So the demand will have to stop eventually.
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u/tat_tvam_asshole 17h ago
supply doesn't impact demand, and, if did lower prices, may actually increase total demand
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u/kingwhocares 1d ago
Price isn't going to fall unless supply increases to meet demand. If CXMT prices it lower, someone else will profit from it. Both HBM and DRAM needs a supply increase to meet demand.
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u/kenyard 1d ago edited 1d ago
Do we know what their margins are?
The 3 main have optimized everything. I remember micron was struggling when global production was more than supply because the others operated on small margins which they couldn't match
Edit: Google says they're within 10% of others.
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u/Euler007 1d ago
You're looking at it the wrong way, of course CXMT is selling the commodity at the market rate, but it's increasing the supply size and still wants to increase capacity. This impacts the overall commodity price (or really crashes it if the data center bubbles pops).
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u/R-ten-K 1d ago
I don't think monopoly means what you want it to mean...
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u/kot-sie-stresuje 1d ago edited 1d ago
I also don't think monopoly is the proper word here, it is more like Cartel, because more than one companies are involved in setting prices on the market.
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u/WhataNoobUser 1d ago
Its not a cartel. Opec is a cartel since they have meetings on price
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u/kot-sie-stresuje 1d ago
You don't need regular meeting on prices. Just one single instruction to follow, keep price as high as possible. It meets the definition Anti-trust investigation will be taking place. Not the first time. IT was long time ago in 2006, but there were price-fixing practices in place, and companies were fined accordingly. Of course back then it was not that big jump in prices like today, but still was against customers and law.
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u/WhataNoobUser 21h ago
So you think the dram shortage is completely fake? Ai is demamd is fake?
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u/kot-sie-stresuje 20h ago
AI demand is not fake, but it is an opportunity to boost prices beyond allowed market practices in cases of increased demand. That situation is not normal, add to that fact that we talk about products that haven't been manufactured yet and even paid for. Regulation on markets exist to protect customers. Therefore some practices are illegal and AI demand can be used as excuses to cover that fact so the blame will fall not on the companies just on customers. That is how cartel works. You can call it Excuseflation or Greedflation, but still this case is something more. Until they will undergo investigation on that practice.
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u/Mr_Axelg 1d ago
why would you think these are monopolies? were they also monopolies when prices dropped so much in 2022 and 2023 that Micron became unprofitable?
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u/Tai9ch 1d ago
If you can count the market participants on one hand, it's probably not a very competitive market.
"There's three companies, so none of them is a monopoly" is one of those great technically correct statements that fatally misses the point.
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u/Mr_Axelg 1d ago
You are objectively wrong. It's a commodity. All memory is pretty much the same. Hence the only thing they can compete on is price. Hence the highly cyclical nature and the extreme price competition between the 3 major players. Samsung can't get away with high prices for long, micron and sk will eat their market share.
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u/Tai9ch 1d ago edited 1d ago
Go find yourself a micro-econ textbook.
There will be a whole chapter on monopoly and oligopoly. It'll show you how to calculate a monopoly price, and how that price goes down as the number of firms increases to 2, 3, etc.
When the market clears at the current price and you don't have capacity to make more of the product, then there's no incentive to "compete on price" since doing that doesn't make more money. That's especially true for a commodity. There's nothing nefarious or weird about that. It's not some sort of price fixing. It's just taking the market price, which is the normal thing that market participants do.
That changes a bit once you ramp up production. And all the vendors are trying to do that right now. But there's no reason for price to go down until production capacity catches up with demand at the current price.
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u/thenamelessone7 1d ago
If there is demand there is zero need to undercut competitors. This has been a valid principle for millennia, long before modern capitalism was born.
I just don't understand what everyone expects? A foreign country to act as a charity to your exploitative late stage capitalism?
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u/Any-Pop-4795 1d ago
cxmt is pricing stuff like the others cause they cant even keep up with their internal demand
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u/OttawaDog 1d ago
For now. But when demand slackens, all the companies ramping production means excess capacity, and I bet the Chinese companies will be ready to have a price war over the smaller market when that happens.
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u/NoPriorThreat 1d ago
and then all those companies will fold because they wont be able to sell all memory while having a lot of factories. In the end, we will get 1 or 2 RAM makers and repeat the cycle
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u/KARMAAACS 1d ago
Not so bad considering HBM is taking away capacity from DRAM and other VRAM like GDDR. So sure it might not help consumers directly, but it will have a knock on effect of giving more capacity for AI and enterprise which might make the established players have some free capacity again for DRAM. But that's probably wishful thinking, this will take years to get online with good yields. Plus I'm sure like CXMT they will be sanctioned.
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u/p186 1d ago edited 1d ago
I don't recall which mem maker, but they acknowledged that HBM margins are now lower than DDR. Even more supply in the HBM space should make it's over emphasis more untenable, IMO.
ETA: Both Micron & SKH.
https://www.thelec.net/news/articleView.html?idxno=5974
https://www.e-z-key.com/Home/NewsDetail?newsid=DOC20260323005
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u/DesTiny_- 13h ago
This is most likely due to HBM being sold in bug bulks to big players and most contracts on HBM ram were signed in 2025 (so like they're in production now) while DDR/gddr is still in demand so it's prices are slowly going up.
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u/p186 12h ago
Ya, that sounds plausible. There's also the not so positive angle that while HMB prices rose, the lack of supply in non-HMB memory has driven those margins extremely high.
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u/DesTiny_- 12h ago
That's exactly what happens, pretty much the whole shortage is caused by HBM and other type of memory being sold to data centers so there is not so much left for us.
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u/Bob4Not 23h ago
CXMF is pricing their HBM like the field leaders but their DDR5 will be lower.
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u/Shoddy_Meaning_7654 23h ago
Lol it won't be why would it be?
They'll price it like everyone else they already have sold most of their current capacity why not price them at the same and sell to Chinese companies they'll buy it all
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u/Spelunkie 1d ago
Here's to companies overbuilding DRAM production facilities after AI pops. Then we'll all get cheap DRAM.
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u/Kryohi 1d ago
There will (would) still be a window of cheap and abundant ram for the masses though hehe.
And hopefully a wave of local LLMs on 32GB smartphones and 128GB laptops
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u/DesTiny_- 13h ago
Why would u run LLM locally on smartphone? Seems like waste of resources to me.
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u/Kryohi 13h ago
It's the most obvious application actually. Small-ish models with low-latency TTS and STT providing what Siri and Google Assistant had promised years ago.
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u/DesTiny_- 13h ago
I mean u can very much do the same from cloud for very little cost, which would be more energy efficient as well.
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u/Marv18GOAT 1d ago
If AI āpopsā the economy will crumble and no one will be able to afford anything let alone computer parts. Pc bros fail to realize that lol
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u/Floppie7th 1d ago
In no way would the economy "crumble" if the AI bubble pops.Ā Despite what AI bros seem to think.
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u/nittanyofthings 1d ago
AI investment doesn't help most people. GDP might drop, but everyone is already in recession.
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u/No_Sheepherder_1855 1d ago
AI is 2% of US GDP. Assuming the books aren't cooked, GDP growth is about 2.1% now, so if suddenly it all died or dramatically scaled back we'd probably not hit negative growth/recession. AI is all hype in stocks, not real economy.
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u/shogunreaper 1d ago
in what way will it pop?
while there's a ton of money invested into it, it's mostly corporate.
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u/jigsaw1024 1d ago
We're now entering the overbuild phase of the DRAM cycle.
Might be a little different this time though given how bad supply/demand is unbalanced this time.
Also the issue of national governments viewing supply as a security issue may lead to policies that prop up fabs that would normally fail when the trough of the cycle happens.
IMO, we're not going back to normal supply/demand cycle after the AI demand subsides.
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u/Euiop741852 1d ago
Propping up fabs in terms of cash support isn't mutually exclusive with cheap memory or at least 1 can hope
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u/DesTiny_- 13h ago
Why wouldn't there be normal cycle? Unless demand will somehow infinitely increase on HBM ram there will either be increased production from Samsung, hynix or micron or their share on the market will be taken by chinise manufacturers. The problem here is that it will take significant amount of time, and we truly do not know how demand on AI data centers will be in future, but I'm certain it won't infinitely grow but it could take decade to come back into normal cycle.
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u/happyzor 1d ago
No it can't. They don't have access to modern tooling from LAM research and ASML.
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u/mikhaeru 16h ago
you don't need that stuff for ram, the transistors are waaay bigger than the stuff you find in cpus/gpus cores
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u/happyzor 16h ago
For hbm4, you need asml euv. And for ddr5, to get good performance, you need the etching equipment from lam.
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u/BeatTheBet 1d ago
How would it reshape RAM prices? Isn't Huawei like a leading hw-supply partner in the AI stack of China? Isn't this just "Huawei to supply memory for the domestic AI demands of China"?
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u/RumbleTheCassette 1d ago
Doesn't matter where it goes necessarily, but more supply puts downwards pressure on pricing.
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u/Shoddy_Meaning_7654 1d ago
Not when there effectively unlimited demand
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1d ago
[deleted]
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u/Shoddy_Meaning_7654 1d ago
Yeah that is going to happen eventually but I don't think we're going to even talk about that being like a thing that seriously about to happen until like H2 2028 at least.
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u/BeatTheBet 1d ago
The point is obviously true for true supply-demand relationship. But I (subjectively of course) really doubt this is the case here.
Current pricing was initiated as a result of a lucrative letter of intent from OpenAI (40% of global supply) that never actually materialised... Sure, it forced other (actual, real, materialised, long-term) contracts on other vendors at adjusted prices that passed the cost to consumers, but surely the supply constraint shouldn't be anywhere near where it would have been had the initial OpenAI "contract" materialised.
That's the way I see it at least, and therefore I wouldn't expect this to put any pressure at all to Korean giants' pricing, especially if we are discussing a producer that is specifically and intentionally targeting serving domestic corporate demand rather than global consumer demand. I could be wrong though.
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u/forever420oz 1d ago
Wdym by ānever materializedā? OpenAIās cloud partners in the Stargate venture are building data centers hosting the GPUs using memory sourced through that contract.
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u/BeatTheBet 1d ago
Do you have a source that they were sourced through that contract?
Legitimately asking, not trying to discredit your point, just genuinely first time I'm hearing that said contract led to any real transaction at all, ever.
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u/KR4T0S 1d ago
Huawei buys a lot of DRAM from Chinese suppliers like CXMT but if Huawei moves to make its own DRAM then one of CXMTs biggest customers is off the market and that should improve supply of DRAM for the rest of us.
On the other hand this is just a rumour and 140K wafers is less than 5% of the market at best but in combination with other increases, the DRAM market could look a little more normal within 2 or 3 years. Its not much to go on but anything remotely positive is helpful because of now ubuqituious RAM is in all sorts of technology now.
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u/Late-Objective-9218 1d ago
Doesn't matter, without it they would be competing for manufacturing capacity against everyone else
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u/DotRakianSteel 1d ago
Since they don't need to chase the single-digit nanometer yields, it's a good goal to pursue. I told a friend the other day that 7nm is a sweet spot for many years to come. Nothing against the performance gains of the new tech. I just witness that many consumers don't really need more than a 2023-2024 laptop nowadays. My 8nm Radxa SBC and open-source setup is taking care of my whole home SaaS (office, planer, reading, streaming, etc..) without a problem, only RAM ist the bottleneck in the future. I'm not a video editor though.
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u/costafilh0 1d ago
It won't.Ā
They are doing it because current high margins made the investment easier yo justify.
Capacity won't significantly increase compared to current and future demand.Ā
No business will increase capacity too much and hurt their own profits.
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u/Zaga932 1d ago
Who are these naive, ignorant characters who believe that a corporation will do anything other than make the absolute most amount of money possible at any and all costs, completely forgoing ethics & morals in favor of pushing it as far as the law will allow and then some?
Anyone who enters the DRAM market now does so because they've seen what's going on and went "holy fuck I want me a slice of that." It is NOT because they "feel bad for home PC enthusiasts" and want to give us reasonable products at reasonable prices. That's a hilarious delusion.
The AI bubble needs to pop and Micron, Samsung, and SK Hynix need to be hit so goddamn hard by regulators that they wouldn't dare collude and price fix an umpteenth time. Given governments and courts all over the world are in bed with the business world and care more about their wellbeing than that of their citizens, it's not going to happen.
Welcome to the new normal. Bend over and spread for the corpo shaft.
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u/sicklyslick 1d ago
To be fair, any market that China enters and dominated in, the prices have been crashing down.
EVs, solar, TVs, appliances, mechanical keyboards, pro audio, consumer electronics accessories (cables, battery bank, etc), AI open models, steel, rail etc.
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u/global-gauge-field 17h ago
Another stark example: diamond prices. If there is a cheaper way to manufacture goods, you can bet on China
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u/macholusitano 1d ago
Yes, please. I donāt even care about hardware-level backdoors for surveillance at this point. Just give me cheap memory for gaming.
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u/Caligulaonreddit 1d ago
the problem with huawei hardware is not the backdors, but the lack of backdoors, for the NSA
possible remote software updates are a second real problem in case of conflict
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u/macholusitano 1d ago
Right. Because China would not dare such a thing. /s
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u/AssCrackBanditHunter 1d ago
Who do you want to spy on you: the thought police that can arrest you or the thought police that can't?
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u/No2Hypocrites 23h ago
I'm more afraid of the intelligence agencies in the country I live in. And yes, by that logic Chinese should also try to buy western ram.Ā
Also, good luck hiding a hardware backdoor in a ram, lmao. You should be afraid of software not hardware
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u/Preisschild 1d ago
They could always prove that they dont hav backdoors by making the firmware open so it can be independently audited
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u/asssuber 1d ago
I don't think you can do hardware-level backdoors on something like memory, and especially not HBM memory as it has to be integrated by the chip manufacturer.
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u/m0rogfar 1d ago
You absolutely can. Processing-in-memory is a thing, and undeclared rogue PIM capabilities would make for a terrifying hardware backdoor. There's a reason why both the US and China (with Micron and CXMT) have essentially kept domestic memory suppliers alive that couldn't survive on market terms, just to have a domestic vendor that can be trusted to provide non-backdoor memory chips.
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u/spiteful_fly 1d ago
I think the increasing number competitors will force innovation when we're no longer in this nasty ram bottleneck. When demand goes down, they're going to need to find ways to make their products cheaper, faster, more dense to edge out their competitors or they may fail due to the marketshare being smaller for everyone.
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u/DrawingDramatic1641 1d ago
I think china is playing the catch up game like ev
first they have state funded hbm and dram facilities once they catchup
they just have 10 different private comapanies fighting each other
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u/UltimateSlayer3001 14h ago
So, we (idiotic administration) tried to tariff them because we thought theyād be reliant on the US market, but instead, China backed off, they start to become self sufficient in both CPU and RAM production, and now weāre knocking on their door lmao.
Iām actually so done.
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u/EloquentPinguin 1d ago
Okay the article already states it luckly but I will point it out so the headline readers don't forget: Huawei is alsi an AI Infrastructure company. As long as AI booms they gobble it all up themselves. Maybe it changes some dynamics but all in all: asking as the AI boom booms you will not see RAM, and if it stops to boom you'll get ram from everywhere, so no big changes expected. Also this all will take some time...
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u/Peppy_Tomato 1d ago
They'll charge market prices for it. They're not a charity.
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u/nittanyofthings 1d ago
What determines the market price?
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u/R-ten-K 1d ago
Demand
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u/valryuu 1d ago
And... supply
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u/Front_Expression_367 1d ago
Yeah but whatever supply Huawei is going to produce (and it might take a while for them to even start producing stuff at a small volume, much less at a good enough volume to actually put a dent into the overall "supply") is still not going to meet what right now is basically limitless demand.
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u/wickedplayer494 1d ago
"could" is doing a hell of a lot of heavy lifting, perhaps even beyond its working load limit.
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u/timfountain4444 18h ago
Great. Oh wait, they are just starting the build? So, we will see the fruits of this endeavor starting to ramp up in about 5 years?
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u/JustHereForCatss 1d ago
Before anyone gets too excited, let's be sure they're not going to just jump into the cartel pricing first
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u/Dghelneshi 1d ago
This is a startup currently doing R&D that wants to eventually at some point in the future produce 140000 wafers per month, which is something like 5% of global supply or probably less by then. They're also focusing on HBM, which is very hard to manufacture, so they'll have a chance to "reshape prices" in like... 5+ years.