Seagate Sparks Memory Sell-Off As CEO Says It Would 'Take Too Long' To Build New Factories (cnbc.com)
- Reference: 0183299643
- News link: https://hardware.slashdot.org/story/26/05/20/1637247/seagate-sparks-memory-sell-off-as-ceo-says-it-would-take-too-long-to-build-new-factories
- Source link: https://www.cnbc.com/2026/05/18/seagate-memory-chip-stocks-ai.html
> Memory chip stocks have soared in recent months as a flood of AI investing has sent demand soaring, with the chips a key part of the AI buildout in data centers. Chip production cycles stretch over many quarters for a single unit, and investors are increasingly wary of how long the leading memory makers can capture demand. CME Group is launching a new futures market for semiconductors, enabling more traders to lock in prices and hedge against the rising prices of computing power.
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> At Monday's conference, Mosely also addressed the "very long lead times" and maintaining predictability with its clients. "We know what's coming out a year from now," he said. "And we've basically gone to the customers and said, 'Look, if you want to plan this really well, which it should be for your data centers, we know what's coming out. You can buy this stuff up to a certain period.' And so we want to keep that four or five quarters of visibility very, very solid for what's being built. But the demand is significantly higher than that."
[1] https://www.cnbc.com/2026/05/18/seagate-memory-chip-stocks-ai.html
Cartel (Score:3)
The memory companies have long acted like an oligopoly and colluded for their own benefit. Unless someone new gets in the game, don't expect them to add capacity because if they all agree not to they make more money. I'm mildly surprised that someone like Apple or Nvidia hasn't invested in a spinoff company to manufacture memory or even formed a jointly owned company to do this. Their costs have to be close to the capital investment required for such a venture.
Re:Cartel (Score:5, Informative)
Yep... back as far as 2006, several execs were indicted for price-fixing RAM:
[1]https://www.justice.gov/archiv... [justice.gov]
There was a class action lawsuit in 2018 over the same issue.
I assume Apple, at least, feels they've taken steps to control RAM availability with their transition to the M series ARM processors, because they integrate the memory and the video memory into the CPU itself?
[1] https://www.justice.gov/archive/atr/public/press_releases/2006/219102.htm
Re: (Score:2)
Apple isn't making their own RAM. They buy the chips from the existing manufacturers and solder it to the board or integrate it in some other way. I don't believe that they're stacking memory on the die, but I haven't kept up with what they've been doing as much as I used to. I don't think anyone has a process for integrating DRAM onto a CPU die yet (the closest is some AMD chips using TSMC that are stacking SRAM cache on top of or underneath the CPU) but it's probably coming in the next decade.
Apple and RAM as part of CPU (Score:2)
Ok... you have me questioning the details now, but the AI overview I just checked says:
"Yes, Apple's M-series chips integrate the RAM directly onto the processor package. Because the memory is built-in as "Unified Memory," it cannot be upgraded or replaced after your Mac or iPad is purchased."
Apple do NOT integrate RAM in the CPU (Score:2)
Apple include at most at most a few hundred MB of RAM(L1+L2+system level cache) in the CPU/GPU.
CPU RAM is SRAM which generally uses 6 transistors per bit. DRAM uses 1 transistor and 1 capacitor and as such is cheaper to produce but is significantly slower.
Also note that there is high demand for CPU/GPU/AIPU manufacturing as well as RAM which can easily be verified by noting the increase in share price of e.g. TSMC.
There will continue to be high prices for RAM, GPUs etc until the AI bubble bursts or produces
Re: (Score:2)
The chinese are getting into the game I belive. They're behind for now but it might not be long until they are taking a big chunk of the market. That's why Seagate should build new factories and sell the memory at a competitive price, but going for temporary gains over long term ones is the american way.
Re: (Score:2)
US has proposed laws to not only ban ASML from selling China DUV scanners but even servicing what's already there. Would be the end of China's memory and flash fabs.
Though that would likely push China into a full on trade war, catapult flash prices into the stratosphere, and hell might even get EU to get into a tradewar with the US. EU is cowardly, but even they will have a breaking point. It comes on top of the tariffs, alternative forms of protectionism and the ICC shenanigans.
Re: (Score:2)
> don't expect them to add capacity because if they all agree not to they make more money
While they were indeed colluding, that's not the issue here. The issue is that largely many people think that AI expansion now is a bubble. RAM prices skyrocketed due to demand that may ultimately not be fully realised. Just look at SK Hynix - they just had a massive order cancelled because OpenAI won't proceed with Stargate.
It takes many years to build a new fab. It's not the kind of activity you do during the bubble. It's the kind of activity you hope you did before the unpredictable bubble arrives. There
tl;dr (Score:2)
$orry I can't hear you.
Re: (Score:3)
> $orry I can't hear you.
... through this huge pile of dollar bills.
Covid broke everything (Score:3)
Before Covid, we had a semblance of free-market supply and demand. Demand would ultimately influence supply to increase, driving down prices. But in Covid companies learned that with just-in-time supply chains and huge barriers to entry, they could pretty much be cartels with no legal consequence and make a ton of money. So when demand goes up they no longer bother with trying to increase supply to meet that demand. In fact they often now reduce supply to drive up prices even farther. In hindsight it's an obvious flaw in the free market system as we practice it, but it was never exploited nearly to the degree it is now.
Re: (Score:2)
The memory companies have been shady for a long time. There are [1]/. stories from decades ago [slashdot.org] covering how they colluded. Covid has nothing to do with them.
[1] https://yro.slashdot.org/story/04/01/02/0341218/micron-seeking-amnesty-in-doj-antitrust-probe
Re: (Score:2)
I'm pretty sure at this point everyone exploited Covid to do this. Destroy the supply chains....weaken supply....raise prices....squeeze the public dry.
This time next year you won't be talking about the computer you'll buy...but the $1200 terminal you have to buy to use the $200/month cloud PC service. They won't be selling to anyone but datacenters.
That's called a smartphone (Score:2)
It costs $1200 and acts as a terminal to cloud services.
Re: (Score:2)
Sorry but that's a load of crap for many reasons.
a) JIT supply chains have been a focus for nearly a century now. COVID changed absolutely nothing and prior to COVID we have also had massive cost demand swings in various industries including tech due to supply and demand disruption.
b) There's very little JIT going on here. JIT is something that affects you in months. The fact that we have had computers delivered at reasonable prices many months after part costs shot up, and pre-builds only really started be
Diminishing returns (Score:2)
What importance does new memory technology have these days? I remember when an upgrade of memory technology used to make a difference. The upgrade from PC-100 to PC-133 was fantastic and noticable. But, these days? It's difficult to notice a significant difference between DDR4 vs DDR6, let alone the nanoscopic changes that happen when you increase memory frequency within the same technology. I mean, flex your e-peen as you please, but whatever technology upgrade we'd be putting off to expand capacity has
Re: Diminishing returns (Score:1)
DDR6 isn't any faster than DDR4. The only real difference is that DDR6 is less reliable.
Re: (Score:2)
Depends on the application. I can point to quite a few places where memory speed actually shows it's face. For example....I can run 8b LLMs on my AMD laptop....but the minute the context window gets anything in it....boy does the speed tank. The internal graphics cores render everything just fine...but the fact the memory is 85GB/s vs 250GB/s makes a HUGE difference.
Re: (Score:2)
When storing big things, moving quickly is unsurprisingly also important. In the context of what's driving the market with LLMs, it basically just boils down to how fast the model can respond. Add a lot of context, a lot of parameters, some "reasoning", and some safety layers on top then it takes a lot of memory, a lot of processing, and a lot of moving information around.
People get pretty frustrated when services are slow to respond or when the answers aren't very good, so that's why there's a lot of compe
That kind of thinking brings in new players.. (Score:4, Insightful)
Except the barrier to entry is too high. It would be fun if someone could manage to disrupt the memory consortium.
Either the companies think this AI hoarding will be short enough to not risk expansion (every economist and corporate type loves constant expansion) or they think their stranglehold on the market is too strong for anyone to offer new competition.
For us mere retail plebs - the corporate greed situation just sucks and is getting worse. This is the situation anti-trust laws were supposed to prevent.
Re: (Score:2)
Ideally there's a 3D memory breakthrough soon. DRAM made like flash would reduce production cost to a fraction (ie. one exposure for 100's of storage layers, it's not the 3D part which is important but the fact it takes only one exposure).
Re: (Score:2)
> Except the barrier to entry is too high. It would be fun if someone could manage to disrupt the memory consortium.
The Chinese are massively rising in the ranks right now. Major PC vendors are currently qualifying CXMT's RAM offerings. But the problem is you're thinking on the wrong time scale. A bubble like this doesn't bring in new players, and indeed the Chinese new players who are entering the market right now actually simply got really lucky as they started building their fabs years ago, before AI was shoved down our throats.
Just a taste of what is coming! (Score:1)
Today no one has the I(Intelligence) part of AI. They are all gambling with their mountains of debt, that they will be the ones to succeed at creating true AGI.
What they have, are Massive Automation Machines which they are marketing and selling as AI. Which require huge data centers and the supporting vendors.
If/when AGI does happen, I doubt it will require hundreds of huge centralized data centers.
What? is each robot going to be bound to communicating with a data center for every little fork in the logic.
Elon Musk and his out-of-the-box thinking ... (Score:2)
... might just give the IC industry the kick in the butt it needs, just like with spacecraft and electric vehicles. He recently stated that the whole IC-Fab thing is done wrong these days and that he might just end up eating a hamburger and smoking a cigar right next to a microfab with higher cleanroom efficiency to prove his point once the first Terafab is up and running.
I'm no engineer, but the "copy-exactly" and "clearroom design" of the late 70ies sure has become long in the tooth and my intuition says
Technobabble translation... (Score:5, Insightful)
He thinks its a fad and won't invest in new factories... but he can't SAY that because he wants that sweet, sweet AI bubble money.
Re:Technobabble translation... (Score:4, Interesting)
No, I suspect it's got more to do with short-term profits and his overall compensation, given he probably wouldn't still be the CEO by the time any new factories were brought online.
Corporate boards typically only reward short-term thinking.
Re: (Score:3)
> No, I suspect it's got more to do with short-term profits and his overall compensation, given he probably wouldn't still be the CEO by the time any new factories were brought online.
> Corporate boards typically only reward short-term thinking.
No not at all. Firstly he's been the CEO of Seagate for a decade and there's no indicating that he'll step down in 3 years. On the flip side we have already seen major cracks in the AI industry.
1. OpenAI cancelled a huge order with SK Hynix when they aborted the Stargate datacentre. - A good sign that the industry is cracking under it's overpromises.
2. Wall Street has actively created indices to allow hedge funds explicitly to invest in companies *NOT* in the AI space. - A good sign that the finance industr
Re: (Score:2)
The demand for DDR5 will evaporate in 2 years whether the AI bubble pops or not. IF new factories are coming online they need to be sized for new tech, but only LPDDR6 has a ratified spec and it's not ideal for AI. So ramping up lot of extra factories for LPDDR6 makes little sense
[1]Sandisk has been devloping an HBM-killer memory called High-Bacndwidth-Flash [techpowerup.com]... but they aren't sharing much information. I'd say this announcement either means High-Bacndwidth-Flash isn't panning out or that they won't need new
[1] https://www.techpowerup.com/332516/sandisk-develops-hbm-killer-high-bandwidth-flash-hbf-allows-4-tb-of-vram-for-ai-gpus
Re: (Score:2)
Remember when Seagate said that about SSDs and then scrambled to buy a 3rd rate one once it was too late?
Re:Technobabble translation... (Score:4, Informative)
Building out a new fab takes years. I have done it.
You have to order the hardware (which has to be made to fill your order -it is not sitting waiting on a shelf), build the facility (some of the equipment is delicate and large enough that you pour a slab, crane in the equipment, and then assemble the building around it). You also need trained workers, and an entire material supply chain. Reliable power and water supplies. Once all that is in place you can begin the process of tuning the equipment -it does not just turn on and start producing chips.
Re: (Score:3)
Well, to be fair, the memory companies have suffered the past 3-4 times that memory prices skyrocketed, they brought more factories online, and then prices plummet just before the factory comes online so they're selling increased capacity into a surplus market.
It's why a company like Kingston exists - Kingston exists solely to absorb surplus memory. If memory makers make too much RAM, they sell it to Kingston and Kingston makes a bunch of memory modules from it. Likewise if they make too much NAND flash, it
Re: (Score:1)
Apple seems to feel the same, and thus doesn't want to tie up too much money in AI. After the poppage*, Apple can snap up AI-ware at a nice discount.
* "bursting"?