AI Has a Memory Problem. But 3 Companies Can Solve It (And Profit)
Speakers
Josh Kale
— Co-Host, Limitless Podcast (Bankless)
Ejaaz Ahamadeen
— Co-Host, Limitless Podcast (Bankless)
Summary
Ejaaz Ahamadeen and Josh Kale discuss the AI memory crisis, focusing on DRAM and HBM shortages that have driven GPU and RAM prices sharply higher. They explain how consolidation among memory manufacturers has given Samsung, SK Hynix, and Micron pricing power and booked capacity. The hosts debate which companies benefit, with Ejaaz favoring Samsung and Josh making a case for Micron, while also discussing Apple's ability to absorb costs, Nvidia's pricing power and SRAM hedge, and consumer hardware inflation.
- AI memory demand has created a $100B supply gap and surging RAM and GPU prices.
- HBM and DRAM are critical bottlenecks for AI accelerators and consumer electronics.
- Memory manufacturing has consolidated to Samsung, SK Hynix, and Micron.
- Suppliers have pricing power and capacity booked through 2027.
- Ejaaz argues Samsung is best positioned to fill the supply gap.
- Josh argues Micron's exit from consumer memory makes it an AI-focused contender.
- Apple may absorb memory costs to gain share, while Nvidia passes costs and uses an SRAM hedge.
- Rising memory costs could keep consumer hardware prices elevated.
Ideas
Apple can absorb memory costs, gain share.
Apple is well capitalized and has secured 50% of TSMC's memory packaging capacity for 2026, allowing it to resist memory price impacts and temporarily shrink margins to gain market share. Current MacBooks are priced similarly to a single PC memory component, making Apple products compelling versus PCs.
Nvidia passes memory costs, hedges with SRAM.
Nvidia has monopoly-like pricing power and is passing memory cost hikes to consumers, raising average GPU cost from $35k to $45k per unit while maintaining 80% margins. Its $20B Grok/Groq licensing deal also gives it an SRAM-based alternative to DRAM, a strategic hedge if memory prices keep rising.
Three memory makers gain pricing power.
Ejaaz bets Samsung will fill the $100B memory supply hole because it has been the largest memory provider for over a decade, has experience navigating memory cycles, and as a Korean chaebol can pull funds from other cash-generating businesses to keep its memory unit alive even in a zero-margin race.
Three memory makers gain pricing power.
Memory manufacturing has consolidated from 11 players to three: Samsung, SK Hynix, and Micron. These are the primary providers of HBM and DRAM for Apple and Nvidia, their supply is booked through 2027, and they can hike prices to fill a $100B supply gap, putting them in a powerful profit position.
Micron exited consumer, all-in on AI.
Micron exited the consumer memory business entirely and shut down Crucial to go all-in on AI providers. Josh argues this focus could let Micron produce more and lower downstream AI memory costs, making it a locked-in contender coming after Samsung's neck.
