The Vergecast RAM Holiday Spec-Tacular

26:09Swirl your wine and I say, I'll have the ram. Thank you. uh it's it's uh it's the point where several of our verge editors um myself richard lawler so we've gone back and looked at how much we paid for ram three months ago six months ago a year ago and we've seen that the number is quadruple what it was good lord uh sticks stick you know i i see reddit stories about um somebody um talking about how they're willing to trade their their pricey gpu for a couple sticks of RAM. And a year ago, that would have been unsinkable. The GPU was the item that everybody wanted. You'd pay$1 ,000,$1 ,500,$2 ,000 for this GPU.

26:52It was that hard to get a good GPU. And now they're saying, oh, well, maybe I should get$1 ,500 sticks of RAM instead for my computer. So my computer has enough memory to open my 100 Chrome tabs. It feels like we'd keep doing this. Like, it wasn't that long ago that all the Bitcoin miners made it impossible to get GPUs. And then all the AI companies made it impossible to get GPUs. And then right before that, we had a chip shortage because everybody was in the pandemic buying like Pelotons and stuff. And so like, how is this just a thing that keeps happening? Like at some point, these South Korean companies should just make more RAM.

27:29Why is this so complicated? Some of it is that it takes a long time to spin up new facilities like these. there are only so many ultraviolet extreme ultraviolet lithography machines in the world we're talking about dozens not is that the thing that's made by that one like secretly powerful dutch company that no one knows about but it just kind of runs the world yep if you want to make the cutting edge chips this is the only company that will sell you the machine uh they fly you have to you can't you can't buy them if you're in china because they think that's a security risk um They have to fly parts all over the world for this.

28:02It would take six months just to take the parts for this machine and construct them into the machine. There are only dozens of them in the world. It's wild. That's for the cutting edge stuff. So there is not everything you're making is going to require the cutting edge machine, but still. I just have to say, I just Googled how much does DRAM manufacturing need EUV, extreme ultralight lithography. And there's answers. But Google's AI overview is like, yes, it absolutely needs EUV lithography. Give it to me now, please. Like this robot is like, I need it. I need it right this second. It's very funny.

28:38It's on a curve up. It is not the dominant. Like Micron only just adopted EUV. And Micron is building out more fats. But to Sean's point, the fabs take a long time to come online. There are so few companies that control this. There's the ASML, per year EVUV machines, the only company that's doing that. There's just the three memory manufacturers. When you come to the other side of the chip equation, TSMC, you know, the big Taiwanese fab company, I think the New York Times said that they, too, single company, was producing something like 93 % of the world's cutting-edge chips. at the time that New York Times report came out, like a couple of years ago.

29:19So there's just, power is in the hands of very few. And those companies, they don't want to risk creating oversupply. In some cases, it can be fundamentally detrimental is their bottom line. They could lose money if they do too much oversupply. I think Micron, in particular, is making massive profits now, but it wasn't always. There was a point one, two years ago that was losing a bit of money. For the other companies, they're like, well, we'd like to maintain long term profits. Thank you very much. We're going to we're going to feast on this as long as we can and not create more than we think we can sell and profit from.

29:57So they're happy to see their average selling prices go up. They're looking at NVIDIA becoming a four trillion dollar company and going, well, that went well. Maybe we also can. Yeah. So that makes me feel like this thing is going to get worse and not better. It's not like I assume there's not some next technology that is waiting to be implemented here. The world runs on RAM in a real way. Are we stuck in this sort of chaotic shortage for the foreseeable future? Or I guess if the AI bubble pops and all these companies go out of business, things change. But short of that, how does this get better?

30:37One thought is that the AI bubble pops. Another thought is that maybe... One little thought. Yes, the world economy crashes because the robot wants to bang you. Your laptop. It'll be easier to get a laptop, though. That's true. But at least Kevin Reuss will find true love. Shout out to K. Shout out to KR, my boy. Happy holidays, Kevin.

30:57Another thought. Another thought is that maybe, maybe they will come up with a version of manufacturing RAM that works better for the AI companies, and they'll switch to that. One theory going around right now is that today we make little chips on wafers, and we cut out those little chips and we turn them into CPUs and memory modules and so on. But maybe in the future we will make giant whole wafer chips, and because those whole wafer chips will be fundamentally much more efficient at moving data within them, maybe higher speeds for memory and so on. Maybe the AI company will switch to those. And so if the, I don't know where the bottleneck is, but if the bottleneck is not in slicing up wafers, but actually in printing out chips, maybe that will make the AI companies more happy.

31:51Wait, I just, the idea is that, let's just say Sam Altman. Sam Altman is going to buy 18 inch round memory chips. That's basically that, yeah, basically. I mean, that's a perfect open AI idea. Yeah. Like we will get so good at manufacturing memory that the yield will be perfect on an 18 inch round silicon wafer. Sure. This is how we get back to vacuum tubes. Do you know how cool that would look sitting on your desk right now? You're just like the Ram guys going up the stairs with their huge wafer. Like instead of dims, you're like feeding them in like giant CDs. Hell yeah. Sure. Sure. I buy it.

32:25There's also like other stuff. There's like packaging stuff. There's like 3D packaging, like all the same chip manufacturing stuff. is in RAM now, right? There's lots of thoughts about packaging things differently. But again, I don't know where the bottleneck is. If it's there's only so many wafers to go around, then we're kind of in trouble if the AI continues to eat all the wafers, you know? If it's somewhere else, if it's in, you know, if we just package this differently, if we just manufacture it differently. And if that manufacturing can be spun out into a different supply chain that doesn't impact all the consumer stuff, that might be nice.

32:59Then again, I don't know. Right now we're talking about the AI companies talking a lot about HBM memory, high bandwidth memory. It's all it stands for, HBM. And so if you're going to use this separate kind of HBM to get more bandwidth in your AI data center, we're thinking that's going to steal RAM production away from the consumer stuff, from the DDR. It takes up three times as much space, according to one of the analysts that Emma talked to for her RAM report. And so if that steals away, that's not good. But maybe we all start using HBM. There was an AMD set of graphics cards in 2015. I used one in a PC that used HBM memory, and it was great.

33:41It made for a very compact, efficient graphics card. perhaps all of that will trickle down. And after AI isn't heating up so much of things, maybe everything gets better in consumer as a result. I don't know. Let's hope. All right. It's like the bubble pops, the AI build-out works out, or we all transition to a new standard that's unproved. These are good outcomes. Perfect. We're doing great. And then you can finally buy a PS5. Like, that's how it goes. Sure. Yeah, it sounds great. All right, we're going to come back to this thread of the story. But first, we're going to take a break, and then we're going to come back, and we're going to play some RAM games, which I am told are a thing that exists and it's going to happen.

34:19We'll be right back. Support for this show comes from LinkedIn. If you've ever hired for your small business, you know how important it is to find the right person. That's why LinkedIn Jobs is stepping things up with their new AI assistant. So you can feel confident you're finding top talent that you can't find anywhere else. And the best part is that those great candidates you're looking for are already on LinkedIn. In fact, according to LinkedIn data, employees hired through LinkedIn are 30 % more likely to stick around for at least a year compared to those hired through the leading competitor.

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35:30That's linkedin.com slash track to post your job for free. Terms and conditions apply. So klingt Weihnachten bei REWE. Jetzt festlich sparen bei deinem Weihnachtseinkauf. Diese Woche bei REWE. Friginette-Sekt, verschiedene Sorten, je 0 ,75 Liter Flasche nur 3 ,49 Euro. Und außerdem Emiraklet Scheiben, Natur, je 200 Gramm Packung nur 2 ,22 Euro. Frohe Weihnachten. Festlich sparen bei REWE. Dein Markt. Geschenke, mit denen niemand rechnet. Bis zum 26.12. in deiner REWE-App. Just open up daily and save Coupons and win chances. Fever. Your market. Get up, turn, go. With the new Volkswagen T-Roc you're ready for the great trip.

36:16Self-conscious and full of power. You're getting up? No compromises. Only you and the moment. Everything is correct. Your sound, your drive, your T-Roc. Rockt. The new T-Roc. This week on Network and Chill, I'm joined by Dr. David Kim, board certified dermatologist, founder of Lightsaver Sun Care, and the minimalist skincare expert with nearly 700 ,000 followers who's changing how we think about investing in our skin. From Stanford Medicine to Sephora shelves, David's journey from clinical dermatologist to entrepreneur and creator Economy Powerhouse is a masterclass in turning expertise into multiple revenue streams.

36:54He's breaking down the truth about what skincare products and treatments are actually worth your money. Get ready for a conversation that'll save your finances, clear up your skin confusion, and prove that sometimes the best investment is the one staring back at you in the mirror. Listen wherever you get your podcasts or watch on youtube.com slash yourrichbff. All right, we're back. It's time for some Ram games here on the Holiday Spectacular. What is this? What is happening to me? Ram games, Neil. Get ready. This is what we do here. All right, Travis Larchuk, our producer, is here. Hi, Travis.

37:31Hello, everybody. Travis, you are in charge, and you have been let loose with several AI tools that make me nervous. You're in charge. What do you have for us? I have two games for you today. The first game, Nilay, earlier you said this was a spectacular, not an acronym-tacular. Uh-oh. You were wrong. because this first game, as we all know, nothing tech people love more than jargony acronyms and initialisms. And as you know, RAM stands for Random Access Memory. In this game, I will give you an initialism. For one point, tell me, does this initialism relate to RAM in any way or is it some random other thing that I snuck in there?

38:20I don't like that Sean is laughing in the way that suggests he's already won. I have to be really honest about this. I don't like this confident cackle that's coming out of my boy Sean Hollister. Look at this. He's nodding. I gave you everything you need to win. Yeah, this is a question of whether Neela and I were listening. Are you listening? The initials came. All right. Do we buzz in? How does this work? We will go in order. That's one point. Now, if the initialism turns out to indeed be related to RAM, there are bonus points available if you can tell me what it stands for. I will give you one point if you get any of the words correct.

38:58I will give you two points if you get it all correct. All right. Okay. All right. Ready to rock? Let's do it. Okay. Let us randomly select the order of our game. Oh, my God. And Sean is up first. Yes. I vibe coded this in case anyone's watching this interface. I cannot wait for this thing to start hallucinating. Your first initialism or acronym is C-A-S or maybe CAS. This is RAM. It is indeed RAM for one point. Come on. Do you know what it stands for? Shit. What's the initialism? I mean, it has to do with latency, but why can't I remember any of the words in it? No, I don't know what CAS stands for.

39:50All right. CAS stands for Column Access Strobe. Oh, my God. As in Column Access Strobe Latency. This is when RAM was made of, like, weird rods, right? Column Access Strobe is a vacuum tube. Yeah, you just pull the rods as fast as you can. You had strobe the rods, boy. That's what they used to say. Strobe those rods. Sean, that is good for one point.

40:21Neal-I. I'm so sorry. What are we doing here? Go ahead. I have good news for you. Your initialism is DDR. Oh, that's great. It's Dance Dance Revolution. No, this is RAM double data rate. Nailed it. Two points. It is RAM. In the lead. Take that, Lister. Double data rate. Three points. All three points. David. We're just playing to Neel Eye here. I see. That's right. Your initialism or acronym is UNR. UNR. I definitely paid Travis under the table. I'm going to say not RAM. You are correct. It says from University of Nevada, Reno.

41:10To be fair, I think you should have let me guess to get two more points. All right, Sean, we are back to you. Ready. You have UMA. That's RAM. Correct, for one point. Universal. It's also UMass Amherst, just to say. It's all universities. All the not-Rams are universities. I don't know the M. Crap. Universal something access, I think. How do you not know the M? Just wait, wait, wait, wait. I'm going to... Think about what RAM stands for. Do you want to take a guess what the M stands for? Just like, you can work it out. Okay, let's try memory. I don't know. Okay, you are correct about the M. The M is memory.

41:53It is unified memory access. Unified. We're close. Wait, does he get two points because he got two words? No, it's one point. It's not one point per word. You get two points total. Okay. Yeah. One point if you get at least one word. Two extra points if you get all the words. Got it. This is when CPU and GPU share the same pool of RAM. Okay. Nilay. D-O-T-A. Perhaps Dota. I'm going to say not RAM. That's a game that uses a lot of RAM. Yeah, I'm just thinking of Ladd's. I love playing Dota 2. That is Defense of the Ancients, an eSports game. David. All right, hit me. D-I-M-M. Dim. It's a RAM thing.

42:35Correct. This has come up already. Do you know what it stands for? This has come up already? That seems bad. Data. David is memory master.

42:51Data intra-machine memory. You got memory. I get a point. It is dual inline memory module. To be fair, technically, I didn't get memory. Yeah, do you have to get one of the words right in the right place? Yeah, I had it on the wrong M. I think I don't get that point. The wrong M? All right. I'm actually willing to say. What an upstanding guy. No, because otherwise you just get to say memory every time and you probably get a point. I understand how to score points, David. I'm kind of willing to say. Sean, you were making a face like you would have gotten this one. Would you have gotten this one?

43:23I would have gotten this one. Yeah. 100%. There was a big moment when I worked in the computer store in high school where Apple switched from Sims to Dim's and it was like all the talk of Macworld Magazine in like 1998. That's why I remember. This is just PTSD. You were pretty cool in high school. I was the shit.

43:44Alright. At the end of the second round, our scores are Sean, 3. Neelai, 4. David, 2. Neelai with the easiest three points anyone's ever gotten. I would have gotten Dim. You would have. That's fair. Alright. This is the last round. Sean, CTU Not a RAM thing That is correct That is The counter-terrorist unit From TVS24 Alright, Nealai ECC That is RAM That is Error correction circuit So close Error correcting code I knew the first two were That was good. All right. This allows RAM to catch errors and is generally used for mission-critical systems and not in consumer PCs. All right, David. Mathematically, no way for you to win, but let's find out what happens.

44:43That's David's middle name. With HBM. That hurts. High bandwidth memory. Hey. Correct. Thank you, Sean Hollister. Thank you, Sam Altman, for your giant wafers. We are playing the games first next time. Next time we're playing the games first, explanation comes after. Somehow we end the game with Sean with four points, David with five, and Neelai with six. Congratulations. Feels right. Sean, clearly the least educated about RAM. I take it on the chin. Okay, your next game is on screen now. As we all know, RAM is the most valuable resource in the world right now. It is Mad Max times, but for RAM.

45:23So we are going to play a white elephant gift swap where the object is to end the game with the most RAM. Here is how it will work. I have nine secret gifts that are wrapped in Verge wallpaper. Each is a gadget containing an amount of RAM. I will not reveal how much RAM until the game is over. Before anyone writes in, I know that not all RAM is created equal. But for the purpose of this game, we only care about quantity of RAM and not quality of RAM. so so ddr4 versus five we're exactly okay doesn't matter it's all worth the same because i heard we're phasing out ddr4 i don't know if you're if you're taking that into account here i heard that and i have not taken it into account uh all right so on your turn you will choose this is like a white elephant yankee swap you will choose to either open a new gift a random gift or you can steal a gift from another player.

46:22If a gift gets stolen, the victim of the steal can then choose to either open a new gift or steal a gift from another player. Each gift can only be stolen one time per round, and if a new gift is open, the round is over, and we go to the next person to start the next round. Once everyone has three gifts, we will play one more round because the person who opens the first gift has no choice during this game. In that round, your choice will either be to swap one of your gifts with somebody else's gift or to end the game. Okay? All right. So we will randomize our order to find out who will open the first gift.

47:02What if I don't want RAM? What if I want the other stuff? Well, that is up to you. But are you looking to win? In the one with my wife's family, everybody wants the lotto tickets. That's the way it goes. All right, Neelai, you get the first pick, so it's just one through nine, and that's all you get. World of no sevens. I'm going eight. Eight. Gift eight is a books palma. Perfect. Congratulations, Neelai. Nailed it. You gave it. Technically, that contains RAM. It does contain RAM. David, you could either steal that from Neelai, or you can open a new gift. This is maybe the one advantage I have over both of you, as I know off the top of my head how much RAM the Books Palma has.

47:47I'm going to open gift number four. Gift number four. You have a shiny new Cybertruck. I am less aware of the amount of RAM in that device. We are talking about the amount of RAM in the Cybertruck's entertainment system specifically. So, Sean, you can either steal Neelai's Books Palma, David's Cybertruck, or you could open a new gift, Sean. I don't want to end with a Cybertruck. Also, Verge wallpaper number seven is delightful, so I'm taking that one. I love this purpley, reddish, blue wallpaper. And you got Meta Ray-Ban Display. Oh. All right. Neelai, you can steal any of the gifts that are out there or you can open a new gift.

48:32This is our second go-round here, round four. I like debating whether or not the Cybertruck has more RAM than the Boost Palma. It's a real toss-up. Let's open number three. All right, you're going to open gift number three. No stealing so far. That is a iPhone 13 mini. Rough. Huh. The favorite phone of many a Verge podcaster and listener. Loved it. So good. Okay. David, you can steal any of the gifts that have been opened or open a new gift. So the dilemma here is, did Travis pick a bunch of things that don't have much RAM, or have we just opened the things that don't have much RAM? I was doing the same calculation.

49:16I am going to make a potentially reckless decision, and I'm going to steal the books, Palma. Yes. All right. Which I think has a non-zero chance of having the most RAM of anything on the board so far. David stole the books, Palma from Neelai, which means, Neelai, you can now make a steal yourself, or you can open a new gift. I'm taking the Cybertruck. straight swap wow nila steals the cyber truck from david david it is your turn to either steal or open a new one give me number two all right gift number two is nila do you agree that the cyber truck either has one or a thousand gigs of ram and like nothing in between yeah my bet i was doing the same calculation as you and i was like i know that the pooks mama doesn't have a lot i'm gonna roll the dice on the cyber truck also it's like only fitting that i end up with the giant wiper.

50:03Agreed. The Switch 2, this is a good get. Yeah, I'm going to keep the Switch 2. I feel good. I'm psyched. Are you going to keep the Switch 2, though? I'm not sure if you are. It is Sean's turn. I am, in fact, taking the Nintendo Switch 2. The Nintendo Switch 2 has been stolen. What's the maximum number of steals? Each item can be stolen once per round. So, like, I can't take it back. Right. But I could, in theory, take the Cybertruck. I'm going to open number five. Number five is the Humane AI pin. this is so cruel and also the fact that i'm gonna end up with the books palma and the humane ai pin feels like i deserve this you totally do my 2025 suggests that i deserve this wait so if there's not a maximum number of steals the end game here gets very complicated yes so yeah each each round uh each item can only be stolen one time in a round but after that round things are open to be stolen again but then there's a swap at the end so we can there is a swap round at the end And just to recap for the listeners, Neelai has an iPhone 13 mini and a Cybertruck.

51:07David has a books palma and a humane AI pen. And regrets. And Sean has meta Ray-Ban display and Nintendo Switch 2. And it is Neelai's turn. Can I just pause, by the way, to say that so far, we have accidentally kind of all three picked our personalities. I was going to say, is the goal to wind up with the most fitting items? Stuff we like. All right. The only correct move right now is to pick a new. So I'm taking number six. I think that's right. Number six. The game theory is afoot. A Pixel 9a. You did pick stuff with not enough RAM. One of these is going to have. This game is going to be made or broken on like 16 megabytes of RAM.

51:47I can see it coming. There's going to be like a Mac studio at the end of this that just wins. And none of the rest of it is going to matter. Holding out for framework desktop. I do have two tiny little phones. It's adorable. and a cybertruck. I didn't say that was adorable. His two cell phones and a cybertruck. That's our boy. Red flags all over the place. Have you heard of Bitcoin? Give me the Switch 2. Alright, David has stolen the Switch 2 from Sean. Sean, you can steal or open a new gift. But I can't steal the Switch 2. So, I think I'm going with number nine. Everyone loves it. He's opening a new gift, and the gift is a Galaxy Z Fold 7.

52:41Now we're talking. That feels like it has a lot of RAM. I know exactly how much. Sean, it is also your turn to start the ninth round. There's one gift left. I'm taking the Switch 2 back. All right. Rough. Sean takes back the Switch 2. David. I can't take it because I'm still in the same round, right? Right. But you're going to get to go next. Got it. I see. All right. Give me number one. Let's do this. All right. David is opening number one. And number one is an Apple Vision Pro. What? How did he pick so poorly?

53:19So. Wait. Okay. Serious question. For the two of you looking at this, do you have confidence about which one of these nine things has the most RAM in it? I'm gonna no I think it's a Cybertruck so I I think there's a chance it's the Cybertruck I also think it's possible that I'm just dead wrong but okay I have the Vision Pro great I have a Books Palma an AI pin and a Vision this sucks I'm sorry dude this is how no one wants to go to your house this is how I want to try out the Apple Vision Pro yeah Travis you can come over everybody else is uninvited to the holiday party you with his dead glowing eyes inside it is a ram starved headset um all right this is the 10th and final round neilai gets to start this round because he went uh first and didn't have a choice in the beginning on your turn you can either swap one of your gifts with one of anybody else's gift or just end the game so neilai it is your choice all right i'm gonna swap the 13 mini for the switch 2.

54:25I feel good about that decision. Okay. Neelai is stealing the Switch 2 from Sean and giving Sean the iPhone 13 Mini. Sean, it is now your turn. You can swap or end the game. You have Meta Ray-Ban display, Galaxy Z Fold 7, and the iPhone 13 Mini. I am going to take the Vision Pro for the 13 Mini. Okay. Giving David the 13 Mini. Finally, David has one useful device. David same choice Swop or end the game End my pain now Travis There's at least one move on that board That I would make There's two but I'm ending the game I'm dancing with the ones who brought me Let's do this Guess what's going to happen when the humane pin Turns out to have 32 gigs of frame Let's go David hates this game Alright we are ending the game With Nilay having the Nintendo Switch 2, a Cybertruck, and a Pixel 9a.

55:28Yeah! Party. David books Palma. He made AI pin, iPhone 13 mini. Spoiler alert, is going to lose the game. And Sean met a Ray-Ban display, Galaxy Z Fold 7, and an Apple Vision Pro. We all have a phone! We all have a phone! You can all call each other. This is great. Let's find out how much RAM you ended up with. David, how's that humane pen? It's okay, I'm looking at you on my laser projector. David, how much RAM does the Books Palma have? I believe it's six gigs. It is six. Wow. Humane AI pen has four. I was gonna guess four. I'm gonna guess the 13 mini also has six. Four. A total of 14. Tough day for David.

56:17Alright. Neelai, we're gonna go to you next. Nintendo Switch 2, does anyone know how much? My guess was 16. That was what's in my head. It is 12. All right. Cybertruck. It's either zero or 1 ,000 for David. 64. It has. 16? 8 gigabytes of RAM. That sucks so bad. It has more inches of wiper than RAM. Brother. And the Pixel 9a has 8 gigabytes of RAM. All right, I feel good about this. Neelai's pink phone and his truck have the same amount of RAM. All of those things are like influencer gadgets. That's what I'm doing. All right. Neelai has vaulted into the lead with 28 gigs of RAM. Sean. I've got a good feeling about this.

57:04Your meta Ray-Ban display. Does anyone know? Four. I don't. Not even the barest. Ooh. Rough start. Big win for the AI pin, that one. Galaxy Z Fold 7 has 12. And this is the base Z Fold 7. 12 gigabytes of RAM. All right. Sean has 14. Neely has 28. The Apple Vision Pro has 16 gigabytes of RAM. Giving Sean the win with 30 gigs of RAM. Wait, David, you would have won if you had held on to two things. I think you would have won, right? Sean took the Vision Pro from me. I wasn't given that option. Yeah. I got you. damn well played sean i also really respect that you had both the most and the least and so you're you're a full you're a full spectrum ram guy i just my bet was that apple always starves everything for ram unless you pay an additional eight hundred dollars so i i was out in the vision pro yeah but it's thirty five hundred dollars i think we paid the additional eight hundred dollars fair enough fair enough my assumption was that samsung overstuffed the phone with RAM.

58:14Wait, can you buy a Z Fold 7 with additional RAM? You can. The highest end model, I believe, has 16. That is ridiculous. You should not be able to change the amount of RAM in your phone. So I have a Palm Pilot here. Anyone want to guess how much RAM is in here? 256 megabytes. Oh, it's a SIM. I have a stick. It has two megabytes. Two megabytes of RAM. Incredible. That's wonderful. Back when a megabyte was the size of your thumb. Those were the days. All right, Travis, this was delightful. Thank you. Congratulations to Sean. Congratulations to Eli. I lost, you know, magnanimously as the host, just so everyone's very clear on that.

58:56We need to take one more break and then we're going to come back and we're going to get back into talking about the ship horse. We'll be right back.

59:11Alle Angebote unter mastercard.com slash Business Bonus.

59:41If it's deep in the rain, it's Brazil. Our bestest in Brazil. Hey Leute, here's Max Giesinger and I have just watched the Harry Potter and the dream of a kid. What a great show. I can just go ahead and take a look at it. You can see it now on HarryPodterTheater.de. Until summer 2026. A last time Magie. Just for a short time. Also, husch, husch in the Warenkorb with the tickets. Now it's real. 250 Arbeitsplätze hängen an einem Sanierungsgutachten. Es beginnt ein Wettlauf gegen die Zeit. Lässt sich der Betrieb noch retten? Oder ist ein Insolvenzantrag schon Pflicht? In Folge 2 unserer Serie Endstation Insolvenz zeigen wir, wie sich Angst und Risiko von Unternehmern in dieser Phase zuspitzen.

1:00:28Doch es gibt Hoffnung. Jetzt reinhören. Im Podcast-Kanal Gute Geschäfte von Kreditreform. Überall, wo es Podcasts gibt. All right, we're back. Neelai is gone. Sean is still here. I rearranged during the break. If you're watching, please clap. And we have replaced Neelai with somebody much better. Dylan Patel is here from SemiAnalysis. Dylan, welcome. Thank you for having me. Real quick, I assume, you know, most people, the brand penetration of SemiAnalysis is like right up there with like Coca-Cola and Walmart these days. But like, what is SemiAnalysis? What do you do? Yeah, so we're a firm that does AI infrastructure, research, consulting, etc.

1:01:06Started five years ago as just a blog and me consulting on the side after I quit my job and it's just sort of blown up and up and up. And now I have a very famous blog as well as, you know, companies, 50 people, you know, all up and down the stack having worked on, you know, equipment that makes chips all the way up to like worked at data centers, worked on models and things like that. So we do a lot of consulting, research, etc. Okay. So I want to start with a question that is sort of about the timing of launching your company, but is also just about this market in general. What I'm wondering is like, is this just what the chip market is like?

1:01:42Did you pick just sort of the beginning of the most bonkers time in chips history to start doing this? Or is this just how chips work? um i mean absolutely today is the most exciting time ever the ability for people to make the biggest change ever right like i think it's the craziest time ever but chips have absolutely just been bonkers right now parts of it are like annoyingly uh slow and parts of it are not but you have to think about the market for let's just take dram right memory um prices are soaring people freaking hate dram right now especially general public um but you know what's interesting is this market has existed this way for years.

1:02:22And, you know, if I go back a decade when I was more of a four and more year on like Reddit and stuff, right? Every three to four years, people would be oscillating between, oh, memory's so cheap. I'm going to put way more memory than I need and people in my PC or whatever. And then oscillating to like, oh my God, memory prices are so high. They're colluding against us. They hate the American public. They hate the public in general. I think semiconductors are a very tough business, right? Memory specifically went from like over 30 companies on the leading edge to just three, right? And in a couple of decades, right?

1:02:57Every boom and bust, more companies go bankrupt. The barrier to entry is so high, despite the fact that there is an oligopoly of sorts in many industries. In fact, most of the semiconductor industry is sort of leveled out to like, hey, there's a player with like 70 % share, there's a player with like 25 % share, And there's like this crappy company with 5 % barely hanging on, right? And obviously things are dynamic because it's technology. So shift stuff does shift. But at the end of the day, there's the barrier to entry is so high. The dynamics of the market are so intense that people are just going bankrupt left and right.

1:03:28That it's just it is a bonkers industry. And I've always thought it was bonkers. You've had these booms and busts. You've had these cyclical nature of the industry and you get smaller and fewer players. But it's never been like this before, right? I've seen low memory prices and I've seen high memory prices, but I haven't seen there are only three players and one of them is getting out of the consumer market. And the consumers, it's not just that they can't buy it because it's high prices. It's that the supply isn't even there because there's an entire new industry eating up all this DRAM. It's never been like this before, right?

1:04:00I definitely agree. If we're just talking about memory, we have seen prices spike about this fast before. Over the last six months, like 50%, 75 % increase in contract pricing. Spot pricing has risen more. But even then, I think we've seen this level of price increase. The thing that's really going to break everyone's brain is the next six months, it's also going to do that again. It's going to double again in price or something like that. And that's what's going to really make people go crazy. And I think the funny thing is, or not even funny, I think just the sad thing is, the reason we're in this position is because this is actually, when we talk about the boom and bust of the memory industry, 2022, PC boom, all this huge amounts of memory was being deployed because everyone's just buying a new PC.

1:04:49And the memory company's built a lot of capacity. And then all of a sudden, oh, wait a second, everyone has a new PC. I keep my PC for seven years, right? Like, why do I need a new PC as an enterprise or as a person? And the PC market falls off like a cliff, and these memory companies are now losing money every quarter. And so from 23, 24, 25, they were not adding new wafer production capacity. The only thing they were doing is as AI came into vogue, they were converting the regular memory production to HBM. And so this has been the longest uninterrupted period of no capacity expansion as well.

1:05:25So this boom and bust, And then also it was the worst bust, right? One of the worst buses like sustain multiple years of losses rather than just like, hey, a year or six months because the boom of PC and COVID was so large, right? So you kind of had this like, like coalescing of like, oh my God, everyone is, we just haven't added any capacity. So like, and then on the flip side, we have the craziest boom in human history, right? Like, you know, I think AI infrastructure is undoubtedly like, you know, the biggest boom in the chip industry on a dollar basis. There's one way to look about this where we're looking at like these companies, there's so few of them and they can make these massive, massive profits all of a sudden.

1:06:06But another way to look about this at this is a couple of years ago, Micron was actually losing money. I don't mean like the revenue was was going down. I mean, like it was in the red, right? Was actually losing money. Yeah. For over a year or two. Right. It's not even like a little bit of time. Right. They had to make like they had to do layoffs. They like shut down factory lines. Right. Like all of this sort of stuff. Right. Samsung, Hynix, and Micron, all three of them had to do this, right? So the sort of like, you know, I would say the more nuanced view is like, yes, this is crazy and the prices are soaring.

1:06:36At the same time, they kind of had no choice to, you know, like, you know, it's like, who would have increased production after you just got out of the red, right? A year and a half ago, right? Like, that's just silly. But even that - No one could have predicted this. So that is my question, though, because even if it's possible that there's nothing we could have done about it, Even if it was inevitable, right, which I think you just made a solid case that it is. Shouldn't we all have seen this coming? Shouldn't like all of those things that you just described are like three year old trends now.

1:07:05And if they're not that hard, at least in retrospect, to put next to each other and be like, oh, of course we were headed towards something totally disastrous here. The thing about this industry is that it's very easy to be bullish, but the most bullish person tends to go bankrupt. right and so that's the scary thing about this industry is if you overbuild the most you end up going bankrupt and that's how we've gone from 30 to 3 right um and so as far as like has anyone seen this like of course i could show myself and say look we told all of our clients we modeled all this production capacity we we we modeled all the uh ai production demands from a data center standpoint from an accelerator standpoint flowed through how many wafers are required blah blah yeah obviously we've been writing about like memory is going to go crazy for the last year and a half roughly, right?

1:07:52But at the same time, it's like, you know, I'm not someone who managed a company, you know, through the last 30 years where 27 competitors went bankrupt and the scars are there, right? The industry has these scars. So there's also that front of like, is this a bubble? Well, I've seen 15 other bubbles and that's bankrupted all my competitors. Why would I go crazy this time? Was there anybody though who was like predicting this? Who's like the, you know, the guy who saw the subprime mortgage crisis coming. Was there anything like that here because I feel like what I'd heard was DDR4 prices are going to rise because you know it's the old standard they're not going to be producing as much of that anymore you know let's let's get ready for DDR5 and then it felt like it was a surprise that DDR5 was in this huge crunch that everybody at these data centers wanted so much of it and even even the companies that that make their business on this Dell the CEO of Dell is telling us you know hey we need to my focus now is to make sure we have supply as if his company hadn't inked deals years ago to make sure that they have enough supply for their consumer products, for their commercial products.

1:08:55Yeah, so at the end of the day, the memory market is kind of a funny one in that you can say, oh, DDR4 pricing is going to go up because it's going out of production. But on the wafer production level, there is sort of like the differences between DDR4, 5, HBM, there are some process differences, but those process differences are not like, oh, it's a separate factory. It is the same factory. The time to change from one to the other is not that long. In the case of DDR4 to 5, it is just a mask change, which can take hours. Now, obviously, the production timeline to make memory wafers takes months, but the timelines to change stuff is quite quick.

1:09:34What it is is that they just didn't add wafer capacity. Now, whether that wafer capacity goes to DDR4, HBM, or DDR5, there is some differences in what's the capabilities. Samsung's not the that great at HPM, but they're great at DDR5, right? Like sort of like, you know, there's these sort of mixes and discontinuities in the market. But at the end of the day, you know, the market is pretty efficient and the margins for each don't differ that much, right? For DDR4 versus 5 versus HPM. So what's happened is just that memory AI is a sort of inelastic buyer, right? If you will, NVIDIA buys, you know, let's take Blackwell, right?

1:10:10Blackwell GPU, 192 gigabytes bytes of memory, you know, that GPU NVIDIA sells for over$30 ,000, right? But at the same time, that GPU costs them like$6 ,000,$7 ,000 to make, and of that, memory is half the cost, right? But if the memory cost goes up 20%, well, they're still selling this chip for$30 ,000 plus, right? So, you know, if it goes from$6 ,000,$7 ,000 to$8 ,000, you know, their elasticity there is not crazy, you know, who the elasticity is crazy for is the PC buyer, the mobile phone buyer. There, the phone costs, you know, or the laptop costs, whatever it is. And if the price of memory doubles and it adds a hundred bucks to the cost of the device, then all of a sudden, you know, guess what?

1:10:57I might not buy, you know, I might not, or it costs even more than that, right? Like I might not, you know, that thousand dollar laptop, you know, for a little bit, there were even thousand dollar laptops with 32 gigs of RAM. And it was like, glory, glorious. Now, now like you you know it's kind of harder to find and i bet next year it's gonna be even tougher right um and so there's there's sort of that that interaction in the market um in that like who is the elastic buyer and unfortunately the consumer is the elastic buyer you know the production you know ai infrastructure spends going from like you know you know 10 billion to 100 billion to a trillion right like we are scaling like crazy and if it gets to you know next year we look at you know the big top five hyperscalers um they're gonna spend uh our top six hyperscalers right Google, Microsoft, Amazon, Oracle, CoreWeave, I'm missing one, Meta, right?

1:11:42You're looking at$500 billion of spend across them, right? On AI infrastructure. Of that, their spend on NVIDIA's is like$300 billion. And of NVIDIA's$300 billion, that spend on memory, you know, after their margins, you know, NVIDIA's largest supplier is SK Hynix, a memory vendor. It's not TSMC, right? So you flow through and it's like, okay, actually next year, the gross, the total volume that AI is consuming is ridiculous. and as far as like, hey, did anyone see this coming? There are a lot of people who are speculatively buying and things like that because the dynamics of the market are clear, right?

1:12:14So if you look at like, there's, I don't remember which PC maker it was, whether it was Dell or Lenovo or HPE, but one of them actually was super smartly about two quarters ago, secured a bunch of DRAM ahead of time and their stock, like there was a call on the earnings call where their investors were like, why did you enter all these long-term supply agreements? Like, you know, you shouldn't do that. You should be just-in-time inventory, right? They were kind of criticizing them like the Wall Street person. And then now they're looking pretty smart because they secured memory at a lower price longer term.

1:12:44But at the end of the day, not all of the memory is... The other aspect of this is this area for AI, the HBM. That manufacturing process is a little bit more complicated. The suppliers are even fewer. Samsung's not so good at it. So NVIDIA locked in their supply for HBM totally next year. But this funniest thing is because SK Hynix is the best and because they have the best HBM, and NVIDIA decided, I'm going to sign a big contract with you at good margin, all of a sudden, SK Hynix is going to be the least profitable of the big three memory vendors because they don't get to sell all their memory at the super inflated price because the market is going crazy.

1:13:17So we've laid a lot of the blame for a lot of this kind of at the feet of AI data centers. But I think for people who don't follow this stuff all the time, these just seem like large buildings full of computers. And I think it's hard to put into real terms how big a project this actually is. Can you give us a sense of the scale of the build-out of the AI data center right now? If we go back just a couple years ago, there were 4 ,000 or 5 ,000 data centers in the world, but none of them were super, super big. The biggest data center in the world three years ago is laughably small compared to what's being built now.

1:13:52The largest data center building in the world was maybe 50 megawatts, 75 megawatts, etc., in that range. Google was building one that was like 100 megawatts. I was like, whoa. Now, when you look at like the size of like some of these campuses, right, it's like, oh, Stargate in Abilene, Texas is two gigawatts. And actually, that one is kind of small relative to some of the stuff that's going up, which is five plus gigawatts, right? You know, Meta's talked about like their Louisiana stuff. The concentration of like value within a data center is absolutely absurd, right? You think about it again, right?

1:14:28This area of Manhattan, it's five gigawatts. five gigawatts, you know, once Meta builds this entire, like, um, Louisiana facility out five gigawatts size of Manhattan, it ends up being the entire cost that they put into it was, was on the order of roughly$250 billion, right? $250 billion for one site in Louisiana that they're building over, you know, a couple of years. Um, which by the way, those GPUs are not going to be, you know, bleeding edge in five years, right? They're going to be, you know, they'll still be, they'll still be maybe useful in five years, but definitely in seven or eight years, they won't be useful.

1:15:02It's just an insane factoid because when you think about it, it's like, you know, like 250, you know, it's hard for humans to understand what 250 billion even means, right? That's more money than the richest person in the world has. But again, like we can't fathom what the richest person in the world even has. So it's just like, there's no way to contextualize this. If that's where we're headed, a different market would suggest that the next thing that's going to happen is we're going to get a million chip startups who are going to come and try to make all of this stuff. And they're in the like, your margin is my opportunity, right?

1:15:36That's this moment that we're in. And every academic, everybody who's interested in chips, you should quit your job and go start a chip company. Like this is the gold rush. And we should be getting an entire new generation of folks coming out and saying there's only three companies doing this. Let's get it back to 30. Let's get it to 300. And there's going to be demand for this going forward. Is that happening? Are we headed down that road? And if not, why not? So there's two sort of layers in this stack, right? There is the design companies and then the manufacturing companies. As far as the design companies, there are some startups.

1:16:11Many of them are going to fail. Maybe some of them will be successful. But that's true of all startups, right? Like this is not necessarily a wildly different kind of thing to try and do. Yeah, but in terms of design, like the barrier to entry is there, but it's not insurmountable, but it is a high barrier to entry, right? You have to design your chip and then tape it out at TSMC and all this costs, you know, 50 million plus dollars. And if there's any issue, you got to do it again, right? So there is a barrier to entry there. That barrier to entry is really low compared to manufacturing, right?

1:16:43We are not going to get many new memory companies. There is one new memory company, but that's because it's like a national level like priority from China called CXMT. but they have national government backing. We're not going to get a new memory company in the West. We just aren't, right? Or in Taiwan or Japan or Singapore or anywhere else in the West. There's just not going to be a new memory company because the physical construction of a fab is tens of billions of dollars, right? Plus all of this know-how that is super trade secreted and super confidential. And it's built upon year after year after year of tens of thousands of people's R &D who are all super, super smart, like PhD level, you know, engineers and researchers just building and building and building.

1:17:31And it's incrementally building on top of each other. Right. For context, right. Building a chip, right. You know, like a leading edge chip, whether it's memory or, you know, say a phone chip, phone CPU or phone memory, right. Or laptop memory or laptop chip that that takes over 5000 process steps. where you take a perfectly, you know, you take a silicon wafer it's a perfect crystalline structure then you bombard it with ions you deposit materials you the ions is for doping, like you do lithography to define where things are and you build this chip layer by layer by layer by layer by layer and any defects ruin the chip So then the other thing that might happen it seems to me is like the other thing you would hope for at the end of this is this is where we get the next breakthrough, right?

1:18:16Right. And you've written about this. I found a blog post you wrote a couple of years ago, basically saying we're sort of at the end of DRAM anyway, that it can't scale the way that it used to, that other parts of the process are kind of leaving its abilities behind and that maybe what we need is something beyond DRAM. And again, we have perfect market conditions for somebody to show up and say, actually, I've found something that I can make cheaper or I can make with a different set of materials that is less, you know, reliant on one multimillion dollar machine from a Dutch company that has to fly in on a Boeing 737.

1:18:49Is that happening? Like, is there a science breakthrough here somewhere? It takes multiple planes, not just one. You're right, it's multiple 737s. So if we can just get it down to one 737, we will have done something. Is there any inclination of that on the horizon here? Yeah, so the interesting thing is, like, when you look at, you know, just, I'll zoom out to just, like, generally semiconductors, they've sort of had Moore's Law, right? And Moore's Law was actually originally about DRAM but people just sort of prescribed it to logic as well. Is that true? I didn't actually know that. Yeah, yeah.

1:19:21Gordon Moore was talking about DRAM. That's what Intel made at the time. They actually lost it. They were one of the companies they didn't go bankrupt they pivoted to processors. But they had to leave the DRAM market because they were getting you know, the market was too tough. Anyways, you know the number of transistors doubling you know, every two years again, like, you know in an area like butchering the definition but whatever happened for decades, right? And Moore's Law was made before Intel's 8086, like the initial coining of it, right? It was actually when they were making only DRAM. It happened for decades, decades, decades, and costs kept going down.

1:19:54As far as the general DRAM vendors, they do have a roadmap to continue to go 10, 15 % cost reductions a year for another decade. They have some innovations that they want to do over the next five years, next seven years about changing the structure of DRAM and such. But the next big one is sort of 3D DRAM. Right. So interestingly enough, NAND flash already went through this. The cost reductions asymptoted out. The physics just didn't let you shrink it smaller and smaller. So NAND ended up having this like big revolutionary update where instead of doing planar NAND, they did 3D NAND. And so they can make many layers at once.

1:20:29Right. And that ended up resuming the cost scaling curves for NAND. And that's why, you know, SSD prices have fallen so much over the last decade. And even the last five years, yes, market dislocation right now, but generally prices have fallen a lot. Whereas DRAM has not really fallen much. And so if they can figure this out, that's what the DRAM vendors are all in on, right? But that means that they're all in on, but so is their supply chain, right? Applied materials, you know, LAM research, you know, ASML, all these companies that are in the equipment supply chain, all of their R &D effort is also focused for memory on helping these companies figure out 3D DRAM because that's what they need next to keep scaling and keep the market growing and keep the industry moving forward.

1:21:09You mentioned China. You mentioned China earlier that there is the state backing there for one company in particular to start making a dent. The big companies, you know, SK Hynix and Samsung and Micron, they're making a lot of this stuff in China too, right? What keeps China from taking over? So as far as what they're making in China, the vast majority of SK Hynix and Samsung's capacity is in Korea, right? The vast majority of Micron's capacity is in Singapore and Japan, Taiwan, and the U.S., right? Micron has no capacity in China. Hynix and Samsung have some, but that's old capacity and they actually haven't upgraded in a long time.

1:21:51With that said, what prevents China from learning is like, I mean, it's just a ton of hard engineering, right? There's a bit of like, oh, people who worked at these companies coming back and being hired. There's all this sort of like claims of like IP theft, blah, blah, blah. But at the end of the day, it's like, look, there's a ton of engineers who are working really hard and they have effectively unlimited money, right? And even then, China still has not been able to, you know, in 2015, they released a five-year plan, which was what their targets for semiconductor production in 2020 and 2025 were.

1:22:22And they did it again in 2020, right? And they've missed every time, despite the fact that they've poured hundreds of billions of dollars. Now, that's not to say they didn't make progress and that they're not going to get there. They will. I do truly believe it because Chinese engineers are really good, right? It just takes a really long time. Now, I don't think this is something a venture-backed business can just do, right? You know, that amount of money is really nation-state level stuff, right? And that's the challenge. And as far as like China, like, you know, the next breakthrough away from DRAM entirely could come from China as well, right?

1:22:54There's no reason why it wouldn't. It's always easier to leapfrog than it is to sort of like incrementally catch up. Is this the moment, though, with the export controls and Trump playing the games around, you know, who can and who can't get NVIDIA GPUs and the national security concerns in the United States about do we want to let China have all the GPUs? Is now the moment that the nation state changes its tune and says, well, we're going to we're going to 10x that investment in these companies to make it to make it happen? Do you see China becoming a global power in logic and in memory the way that we already know it's a global power in all the other ways?

1:23:35Yes, I think that's absolutely going to happen one day, right? China is going to catch up. I want to just go back to the thing you alluded to at the very beginning, which is my last question for you was going to be, when does this get better? And when does my computer get cheaper again? And I think the answer is, A, maybe it doesn't. And B, it's certainly not happening anytime soon. Is that right? Basically, about last year, this last year, Hynix, Micron, Samsung, they've decided to start investing in building new fabs again, right? Instead of just upgrading old fabs, keeping the old fabs going, changing the process, blah, blah, blah, they've decided to build new fabs.

1:24:14Takes two-ish years or three years, depending on the timescale of the construction progress. So in 2027, we will have new wafer capacity coming online. And you're literally just talking about like the time it takes to build a building, right? Like it's not, there's not some like magic they have to do to set up these new fabs. It's just literally like they have to go do large scale construction. It's large scale construction in the cleanest environment humans have, which is a clean room where there's less than a particle, you know, a million, you know, like the million particles per square meter or whatever is like absurdly low, right?

1:24:45to the point where human skin flakes are the most dirty thing in the fab, and that's how you wear the bunny suit. There's all the complex chemistry. They have all these sulfuric acid and hydrochloric acids, and they have all these different chemicals, like photoresist. There's thousands of chemicals used. There's these tools that range all the way from these$200,$300,$500 million tools that get flown in on multiple 737. The human logistics required to build these fabs is absurd. And so, yeah, it takes a couple years. and then setting up the fab, making sure it's clean, running the process, et cetera.

1:25:16Best case, prices get cheap again in 2027 or continue to fall again in 2027. Okay. But depends on what happens with AI. Because as I mentioned, everyone who's building these fabs is super conservative, right? Right. There are these 55-year-old men who have seen many busts. And if you take what our predictions for AI supply chain demand or anyone else who's sort of like super in tune with this, what we think, you know, the number of GPUs, the types, the memory, all the volumes required, actually prices will get worse in 27 too. But that's if AI doesn't pop as a bubble, right? Now I'm a maxi. I don't believe it'll pop.

1:25:53I think there's trillions of dollars of economic value that will be delivered through AI over the next few years. You know, that's me. But if you do believe AI bubble will pop, then 27 will have cheaper prices. If you think AI, you know, just continues to go, then we're screwed. And actually memory will never be cheap again. And we might as well like stop using our computers. It is truly wild that you actually, you have to make your computer buying decision in 2026 based on macroeconomic and giant geopolitical headwinds. This is where we are in the world. Should I buy a Dell XPS 13 is actually a question about like the state of the economy in the world.

1:26:36This is why we do an hour on RAM, friends. This is what we're doing here. All right, Dylan, Sean, thank you so much. This has been delightful. I appreciate you both doing this. Thank you so much. All right, that is it for the show. Thank you to Neelai and Sean and Dylan for being here. And thank you, as always, for watching and listening. This is actually our last Vergecast of the year. We're all going to disappear into the holidays for a couple of weeks, and we will be back in the beginning of January for CES. We're going to do an episode kind of right as all the news is happening. And then we're doing a live episode on Wednesday, January 7th in Vegas at the Brooklyn Bowl.

1:27:09So mark it on your calendars. It's going to be in the afternoon. Come hang out. Come Vergecast. We're all going to go bowling. I've never been bowling with Nilay. And I have this sneaking suspicion that he's either very good or like hilariously terrible. And I'm very excited to find out which one it is. So come bowl with us. Watch the Vergecast. It's going to be very fun. Also, in the meantime, there's a bunch of decoder for you to catch up on. We have a couple more version history episodes coming out this season. We've got TiVo left to do. We've got the Nintendo Power Glove left to do. We've got Flappy Bird left to do.

1:27:38They're all very fun episodes. They're all coming out the next few weeks. Make sure you go subscribe to all those shows and subscribe to The Verge if you want to get them all ad free. Until then, we're getting out of here. The Verge Cast is a Verge production and part of the Vox Media Podcast Network. The show is produced by Eric Gomez, Brandon Kiefer, and Travis Larchuk. I hope you have a wonderful holiday. We will see you very soon. Rock and roll.