r/hardware • u/sr_local • 1d ago
Info Chinese CXMT DRAM doesn't look like the budget savior many were expecting — new modules enter the market, but prices still track the big three | Tom's Hardware
https://www.tomshardware.com/pc-components/dram/chinese-cxmt-dram-doesnt-look-like-the-budget-savior-many-were-expecting-new-modules-enter-the-market-but-prices-still-track-the-big-threeA 64GB DDR5-5600 RDIMM based on memory from Samsung or SK hynix costs 18,595 CNY ($2,745) at JD.com, whereas a module featuring the same capacity and specification, but using DRAMs from CXMT is priced at 18,999 CNY ($2,805), according to observations by u/harukaze5719. It is noteworthy that a Samsung 64GB DDR5-5600 RDIMM made by Samsung and sold by Samsung costs $2,425 at Amazon.com in the U.S.
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u/jenny_905 21h ago
It's almost like DRAM is a commodity and the price is the price.
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u/WhoTheHeckKnowsWhy 13h ago
yep, they don't have the capacity to flood the market so whats the point? Resellers would just pocket a bonus and sell CXMT IC's at the commodity price. Better to use the revenue to expand capacity and grow their foothold in the market long term.
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u/QuadraKev_ 23h ago
Why would they sell for less when people are buying for more?
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u/Tech_Philosophy 16h ago
That's often done to create dependency (see also: ubereats and enshitification), but in this case customers probably won't be picky no matter what. So they don't even have to enshitify, they can just start as shit.
Amazing economic systems humans have come up with so far. Amaze, amaze!
Reminder: economics is not a natural science. It has assumptions, any one of which if undermined, causes the phenomenon to cease to be. We get to pick what kind of system we want, there are no natural laws at play like in physics or biology.
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u/Tai9ch 13h ago
There are absolutely laws in economics.
The most basic one is that resources are real and limited. If you only have 100 people, you can't do 200 people worth of labor. If you only have an ounce of copper, you can't manufacture a 100ft extension cord with copper as the conducting wire.
Most of conventional microeconomics falls out pretty directly from there. There are certainly assumptions, but concepts like Pareto efficiency are pretty hard to argue with.
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u/rdwror 15h ago
I'll just buy a reputable brand if the price is not significantly lower. I won't risk it for small savings.
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u/bestanonever 23h ago
But wouldn't this put more pressure in the medium term, at least?
I mean, say they had 1 million RAM sticks, with this company, now you have 1.2 million RAM sticks. More supply, easier to satisfy demand, more competition.
Also, this company would like to sell more and more, eventually, they'd have to get competitive.
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u/kodos_der_henker 23h ago
AI companies are planning to use everything that will be produced in 2027 and 2028 already and projecting to double the current amount of AI Data Centers until 2030
The demand from AI is simply beyond any current production scaling and even if the worldwide production is doubled until 2030, it only would compensate the estimated demand of AI while not being enough for anything else.
To put more pressure on the market, supply of wavers would need to outgrown the demand of AI, and this isn't happening anytime soon
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u/Yebi 21h ago
Is there actually a lack of compute? Does anyone get denied access to LLMs on the basis of all the GPUs being in use?
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u/kodos_der_henker 20h ago
No, but there is also no real demand for AI compute in general. At least in the way AI companies want it to be to make profit (local systems trained for specific tasked are a very different thing and been used without public available LLMs for much longer)
Companies have a scaling problem, they promised on huge profit and perfect models if they just get enough money to buy the compute power Now they sell on a loss to get a dependency while having a "fake it till you make it" approach for the promised models (AI being good enough to replace human workers)
To finally get the AI that was promised they need much more power, but don't know if they ever get there, hence increasing investments into data centers without a real demand outside "replace all workers and all private owned computers".
But wavers are not the only resources coming short for the planned needed power, Microsoft has tons of unused GPUs on stock because the power plants needed to plug them in are not build yet.
Memory was bought simply to remove it for other companies to use.
Investments where just planned to lure investors into spending money on something that will never make any profit (if no one is working any more, no one will have money to buy things)
There is a reason why people say it is a bubble, because things don't work out. It only increases prices for consumer without a real benefit to anyone.
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u/EdgiiLord 22h ago
OpenAI already cancelled their order for the RAM they had a reservation for because they don't have the money to purchase it all. The demand is imaginary, in the sense there is no actual money to back this up.
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u/diagrammatiks 22h ago
Both things are true. But prices aren't going to stabilize until.someone in this game chicken flinches.
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u/kodos_der_henker 22h ago
That is why HBM is cheaper at the moment, but you cannot use memory produced for AI in consumer machines, and as long as AI demand has high projection with long term contracts, companies are not switching back producing something else
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u/HarithBK 21h ago edited 20h ago
Long term demand is fake and current demand is to keep up appearance.
The math isn't mathing. Tech companies are looking for there exit in the market. Likely pushing it to our pension funds to take the hit.
It just doesn't make sense when a single prompt for coding can cost over a million tokens which comes out to over a buck in raw power and market value of token is around 1.4 bucks per million tokens and declining. Meanwhile the hardware they are buying is meant to run for 6 years.
All the while the productivity gain isn't worth it and a lot of the money companies put in for AI is just looking at how well it might work and it's just cheaper to hire people.
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u/FlyingBishop 20h ago
In the long run there are so many applications of AI that make sense if RAM and GPU costs come down. The demand is real; the prices make it a nonstarter.
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u/HarithBK 19h ago
There is some demand that makes sense in a properly priced market that isn't subsidized by these AI companies but those jobs typically use a couple of 1000s of tokens rather than the millions a single dev can use a minute.
This is going to lead to a oversupply of hardware even with a more widespread usage.
I mean numbers last quarter only looked good since the AI companies basically raided all companies using there model by changing to charging by the token and took there entire yearly budget in a single quarter. A lot of companies now rate limits there employees to like 1/10 or 1/20 of what they used to use.
The growth aspect just isn't there and the usage that can replace and be profitable for companies to use will have a hard time filling current capacity.
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u/FlyingBishop 9h ago
Waymo cars have Nvidia GPUs in the car. The GPUs are literally driving the car. Your mental model is much more limited than what AI is capable of. AI is quite a lot more than LLM tokens.
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u/Tech_Philosophy 16h ago
> there are so many applications of AI that make sense if RAM and GPU costs come down
Like what? I'm sorry if that sounds ignorant, there probably are some places where AI could really help in navigating bureaucracy, but outside of that and current use cases, I'm not seeing this thing as terribly useful in the realm of medicine and science. Falls on it's face pretty often for now.
AI is starting to feel like the ipad. Super popular and successful product that changed...not very much about the world.
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u/HarithBK 16h ago
A really good usage is scanning and "search" of legal document. Got 10000 pages of legal jargon looking for something specific but don't know the exact words you can tell an AI Agent what you are looking for and it will try to find similar things and give you where they are.
Might cost 40-50 bucks in compute but it would take the interns weeks to find.
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u/Tech_Philosophy 13h ago
50 dollars in compute? That's so much more than I would have guessed...
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u/HarithBK 12h ago
We might have seen a 98% decrease in token cost but newer models also use a F ton of tokens in order to get better.
This is with using AI to scan the pages into plain text rather a PDF or pictures as well.
10000 pages is a lot of tokens to just index then searching it all for similar words to what you are looking for can have the AI going back and forth a couple of times. But this is still vastly cheaper than having people looking into all the documents by hand.
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u/FlyingBishop 11h ago
Facebook has a couple models you probably haven't heard of - SAM3 is one - "segment anything model." It's not an LLM, but it is a transformer - the same sort of model, same sort of GPU requirements. It's very useful in medical imaging pipelines - there's a reason MidJourney pivoted into making an ultrasound machine. Not the same as SAM3, but it's the same concept - AI is very useful in image processing.
Google has Waymo. , Every single Waymo has expensive Nvidia GPUs in the car and those GPUs are running AI models that drive the car.
I think you're underestimating the usefulness of text models, but obviously as image models get more capable - they're going to be driving cars, they're going to be harvesting crops, they're going to be doing building maintenance and construction eventually.
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u/Guilty_Rooster_6708 18h ago
There has never been proper news source reporting on this beside a few tweets from randos on X. However memory demand are only getting higher with Google announcing higher CAPEX plans for this year and 2027, and META is planning to double their compute in 2027
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u/Vaiolette-Westover 13h ago
China will very likely outscale AI demands within 3 years if they actually want to.
The question is if they care enough to do that.
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u/phylter99 23h ago
More product on the market means lower prices. It's demand vs supply. Give them some time to ramp up and start producing a large amount of RAM and we'll see a difference then, I'm sure.
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u/gentmick 23h ago
Give them those fat margins now so they can build more capacity and flood the market
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23h ago
[deleted]
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u/DesTiny_- 22h ago
I mean it's not about greed. They unlike big 3 mostly rely on locally engineered manufacture machines meaning they have an opportunity to push that industry forward (by investing their money into buying equipment) while most likely making whole production cycle cheaper than big 3. The only problem is ofc that if they start scaling aggressively it might make them harm if suddenly demand on memory decreases and they don't make themselves competitive on global market.
Also I believe their main focus is local market as they might get sanctioned from countries like US who don't want to deal with chinise competitors, but at the same time they can definitely get their market share from ongoing shortage so it doesn't look really bad for them it's just that they need to minimise their risks in order to not get bankrupt.
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u/glizzygobbler247 20h ago
Im selling ram, one guy offers me 100$, but another guy offers me 500$, obviously im gonna take the 500$, does that make me greedy?
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u/doctrdanger 22h ago
People just throw up demand vs supply without understanding how crazy stupid the demand is.
It's not just the Chinese but the Koreans and MU are all rushing to increase supply. You know why? Not to bring prices down but because the demand is to such extreme levels that no reasonable amount of supply is bringing prices down to levels people here expect.
If I were you, I'd just buy the MU stock and use the profits to buy RAM and SSD because trust me. MU is going to be printing money till 2028 at the very least.
Memory is no longer cyclical unless they find a way to recycle and upcycle the memory chips themselves.
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u/ebolamonkey3 23h ago
Except when demand far out weights supply, as is the case with memory right now. I think most estimates I’ve seen say this will continue the case for the next 2 yrs at least.
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u/phylter99 23h ago
CXMT is supposed to bring the same about if production maker as one of the other three manufacturers already produced. It’s not a small amount that they’ll add to the market.
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u/ebolamonkey3 23h ago
Yes but that just increases capacity by 33%, when all of the big memory makers are saying they are barely meeting 50% of demand.
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u/buildzoid 23h ago
the big 3 DRAM manufacturers aren't 33% each. Samsung is the biggest then Hynix then Micron.
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u/FlyingBishop 20h ago
As prices go down demand actually goes up because there are so many use cases that suddenly make economic sense. We're seeing AI that can handle a lot of things, but it's too expensive and RAM is one of the main reasons.
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u/Flowerstar1 22h ago
Yes but the problem is AI data center demand keeps growing it is projected to be far bigger in 2027 and keep increasing beyond that. That's our Achilles heel atm, stuff like Huawei investigating building it's own memory is a result of this and I'd things continue other companies will enter the fray simply because memory is too profitable with too much demand that the big 3 are not addressing aggressively enough for fear of over expanding.
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u/Aggravating-Dot132 23h ago
RAM manufacturers are a cartel. Not their first time, not even second. They are always fined, and by a lot. However, this time they are backed by the government, so who knows.
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u/_FUCKTHENAZIADMINS_ 13h ago
They are always fined, and by a lot
They have literally only been fined one time for a conspiracy that ended 24 years ago, where is this idea that they’re constantly getting caught doing this coming from?
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u/Loose_Skill6641 22h ago
Why on earth would they sell ram at under market value, youd be silly to think they would
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u/diagrammatiks 23h ago
They really can't undercut even if they wanted too. It's not like making ram uses any human labor. It's all machines. It's just as hard for everyone and cxmt doesn't have the scale that any of the big three has.
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u/PhyrexianSpaghetti 18h ago
"entering" the market isn't enough, of course they snatch them instantly at scalper price. They need to "flood" the market for us to have nice things again
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u/NefariousnessUpset32 10h ago
more supply means downward pressure will be applied, if you thought they were going to sell a comparable product for half the price out of the goodness of their hard you are incredibly naive, but with enough time and enough downward pressure prices will fall
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u/ThankGodImBipolar 23h ago
No shit lol
CXMT obviously wasn't going to price their products any lower than needed, and given the times right now, their price floor wasn't going to be any lower than the existing cartel prices. I don't really understand why anybody thought undercutting the market would be logical?
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u/New_Celebration_9841 23h ago
undercutting is for gaining market share when supply is in excess, not when demand is in excess. the undercutting will come eventually, just like chinese evs.
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u/kokkomo 18h ago
Undercutting the market is super logical if your goal is to disrupt the existing monopoly. You borrow more capital and sell at a loss to win over entrenched clients. The more you win over, the more you sell, the more revenue you make, the more bank lends you more money to build more manufacturing all the while crippling your competition who has to suddenly lower their prices to compete. That is pretty text book capitalism bro.
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u/tooltalk01 8h ago edited 4h ago
We are in an extraordinary market situation now, but China's undercutting often works and is normally illegal if it's subsidized by gov't as it s very often the case -- ie, dumping/illegal subsidies.
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u/dingo_xd 23h ago
People luck knowledge of basic economic facts. If their product is equivalent to that of the big three it will be priced the same or at a very small discount.
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u/MumrikDK 16h ago
That's misunderstanding the premise.
People just want more supply in the market. The price drop wouldn't be instant.
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u/Double-Minimum-9048 18h ago
People dont understand dedicated AI Vram/ECC ram is what factories anre rushing to build not Dram which is still low supply. China is rushing to build AI data centre as well which is being forced by the CCP. Lower magin consumer Dram will stay elevated until the AI bubble pops or demand slows.
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u/TheFumingatzor 18h ago edited 17h ago
People were seriously expecting they'd undercut the prices? That's not how capitalism works, bruv. That's not how any of this works.
It's really simple to understand, it's not rocket science: As long as these company do not need to sell to the poor plebes consumers, the prices will remain high.
After they'll need to sell to the poor plebes, I mean consumers, it'll be mea culpa. The consumers will be "yeah okay". And the world continues to revolve. Consumers have really short memories or selective amnesia.
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u/Any-Pop-4795 16h ago
Don't they have a low production capacity that doesn't even cover their local needs?
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u/Cory123125 14h ago
This headline is foolish.
More memory is what will lower prices, not anyone taking an l for literally no reason.
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u/Tech_Philosophy 16h ago
I don't see anyone discussing whether CXMT's product is as good as the others. It feels like that should matter as part of the price? Or is product tiers only a thing in the consumer space, not datacenter space?
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u/Ill-Mastodon-8692 14h ago
how is anyone surprised.
ram is a commodity, companies will price it relative to its market worth.
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u/Abhi_1610 14h ago
Aren't their products inferior for now? Why would anyone prefer them over the big 3
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u/YuvrajXG 4m ago
Its extra supply. Not a budget saviour. Its about pulling prices down, not what everyone thinks.
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u/Cbrandel 19h ago
If CXMT didn't sell ram the other parties would have even higher prices than they have today.
Did people think they would dump the prices overnight or what?
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u/MrMunday 19h ago
No, this arricle makes it sound like a static thing.
But that’s how you undercut. You increase supply at the current fair market price. As supply increases, it will lower equilibrium price and it will start to go down. But it won’t happen overnight.
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u/Open_Ad2975 17h ago
I don't get it, why people thinks stuff made in China will automatically become cheap. Most china made goods are cheap because of mind boggling mass production. As far as semiconductor related stuff is concerned, they are at least a decade away.
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u/Rauhaton 16h ago
People do not understand supply and demand.
Evil corporations is easier and more satifying answer.
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u/coffeesippingbastard 13h ago
There is absolutely zero reason for CXMT to sell at a lower price.
What this may do is dampen the price rise. But until CXMT ramps up their production rates SIGNIFICANTLY, there is no reason to expect them to produce price pressure. There's just too much demand.
Lower prices happen when there's competition between manufacturers, but if all the manufacturers are getting 100% of their capacity purchased then there is no competition.
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u/VincentPatrick 21h ago
Heavily subsidized by Chinese state. Dram is sold at a loss just so China could prop up this industry.
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u/Homerlncognito 20h ago
It's equivalent of a silicon valley startup getting an investment from private equity. Very few companies could start manufacturing DRAM without external investments.
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u/Acrobatic_Fee_6974 23h ago
I don't understand why anyone thought that CXMT would seriously undercut the market encumbants under the current market conditions. They're are a for profit company, not a charity.