Along with that, they take a good hard look at how they are using their scarce resources, checking to see that they are selling into the most profitable markets and asking if they should be redirecting their output to more profitable businesses, Handy said.
That’s what happened to Crucial. If Micron had to make a choice between consumers and hyperscalers, the hyperscalers were always going to win. Hyperscale orders are orders of magnitude larger than individual consumer purchases, hyperscale customers are more sophisticated and need far less support than consumers do, and there are fewer competitors for hyperscale orders. None of the smaller DIMM makers can satisfy orders as large as the DRAM makers can, Handy said.
And there is no chance that Micron will be left holding oversupply of memory, he adds. “I am sure that Micron will find an enterprise home for every single DIMM that they don’t sell through Crucial. Things are that tight.”
Server DIMM prices are higher than consumer DIMM prices, but they are also held to higher quality standards, so that may not automatically make them more profitable. “What is a more important factor is that it’s far cheaper for Micron to sell 10,000 DIMMs to a company who doesn’t need a lot of tech support than to sell two DIMMs to an individual who needs a lot of handholding. Even without the different service requirements, any company would do better to sell 10,000 units at a pop than to sell two,” said Handy.
The HBM supply Is also rumored to be extremely tight, to the point that manufacturing of GPU add-in boards is being held up because the manufacturers can’t get enough memory. HBM uses the exact same DRAM process as DDR up to the point where the DDR is ready to be packaged, so the HBM supply will also be alleviated to a point.
The DRAM market is constantly oscillating through cycles of over and under supply. One month there is a glut, next month there is a shortage, after that there’s another glut. This is no different, Handy said.
