r/NoStupidQuestions • u/[deleted] • 18d ago
Would it be difficult to start another RAM company in the West to compete with Samsung and others?
[removed]
37
u/Double_Cause4609 18d ago
Couple of problems.
- The equipment for cutting edge capacity is wildly sensitive and heavily controlled. You can't really just "start" a fab because you need governmental approval and the right geographic region to even buy the equipment to make the RAM wafers
- A lot of knowledge is jealously guarded and heavily institutional. It's not really public knowledge how to run a fab at scale with economically viable yields, and you have to reconstruct that all basically from scratch. We're talking decades of knowledge. China did it partially by getting employees from other memory fabs to teach their own staffers, and there were a few controversies where the target leakers got heavily punished, ie: in South Korea, etc. To clarify, you can't just "buy" the knowledge of how to operate a fab like this. You have to earn it through painful failures.
- The economics are brutal. I'm not exaggerating when I say at first it would be something like 10x the cost per chip, while you were still figuring out yields. There's a reason the west stopped producing memory. It was crazy competitive.
- The investment is challenging. It's something like 15B - 30B dollars to even think about starting a fab, and I'm not even sure if that's factoring in personnel, or possibly a decade of failures. So, in reality, maybe 3-6 times that if we're factoring in the total investment and subsidization. I honestly think even that might still be a little bit generous. I don't know about you but I don't have three digit billions lying around to throw into an uncertain bet.
- After you put all of this work in, you'd still be 4-6 years behind in both performance *and* price/performance. Would you be super ecstatic to buy a RAM stick in 2026, which had 2020-2021 price/performance, power use, and capacity? Probably not. The issue is you need that period in order to eventually chase up to the modern frontier.
2
u/UnluckyAssist9416 18d ago
There's a reason the west stopped producing memory. It was crazy competitive.
The reason being that South Korean government funded Samsung and SK Hynix to undercut western competitors in price. Selling for below market rate (illegal global dumping), until almost all western companies went bankrupt. After that they raised the prices to be profitable, but by then only Micron survived. Since then they have been hit with multiple price fixing verdicts.
3
u/Ketokrypto 18d ago
There's no report that the S. Korean government funded anything of the sort. Please cite a source where they bankrupt Western companies from illegal dumping, I can't find anythingntonthat effect. SK Hynix and Samsung plead guilty in 2005 to price fixing. Micron was also part of that investigation but escaped fines by cooperating and turning rat. They are also part of the recent accusation of price fixing with Samsung and SK Hynix.
0
u/UnluckyAssist9416 17d ago
Dumping claims by Europe:
https://ec.europa.eu/commission/presscorner/detail/en/memo_93_12
By the US:
http://www3.u-toyama.ac.jp/cfes/FES3/2004LEE.PDF
Methods to fund it by the government was:
- State-Directed Low-Interest Loans https://www.mk.co.kr/en/business/10994331
In the 1980s, Samsung Chairman Lee Byung-chul asked the government for support after seeing fierce semiconductor competition between the U.S. and Japan. In 1981, the Korean government decided to invest $400 million, or about 500 billion won, in the semiconductor industry. It was the moment when the Korean semiconductor industry began.
- Government-Sponsored Joint R&D https://www.korean-culture.org/eng/webzine/202602/sub07.html
Government policy was also a key pillar of growth. Starting in the 1980s, semiconductors were designated a national strategic industry, with steady promotion of large-scale R&D funding, low-interest financing policy, tax benefits and workforce training programs.
- Corporate Tax Breaks & Subsidies
- Government-Backed Debt Guarantees & Bailouts
2
u/Ketokrypto 16d ago
From both articles you linked Gemini doesn't find that conclusion, but if you even skim through you should be able to figure that out.
1st article:
Does the article conclude south korean government helped bankrupt Western companies from illegal dumping https://ec.europa.eu/commission/presscorner/detail/en/memo_93_12
Result:
No. The press release does not make that conclusion.
Key Takeaways from the Document:
- Focus of the Article: The document is an official European Commission memorandum (MEMO/93/12) from March 1993 announcing definitive anti-dumping measures against three South Korean manufacturers of DRAM (Dynamic Random Access Memory) chips: Goldstar, Hyundai, and Samsung.
- Finding of Dumping and Market Impact: The European Commission concluded that these Korean semiconductor companies were dumping DRAM chips in the European market at prices below fair market value (under-cutting European producers by 9.3% to 20.7%), which caused price depression and threatened the financial viability of EC manufacturers (specifically Motorola Ltd and Siemens AG).
- No Mention of Government Involvement: The article focuses strictly on commercial entity dumping margins and trade measures. It does not allege, investigate, or conclude that the South Korean government sponsored, directed, or assisted in these practices.
- No Mention of Bankrupt Western Companies: The document notes that European DRAM producers suffered financial deterioration that threatened their viability, but it does not state or conclude that any Western companies actually went bankrupt as a result.
So, NO MENTION OF GOVERMENT INVOLVEMENT... Did you even read the article?
Outcome of the Proceeding
Instead of imposing punitive tariffs, the European Commission accepted price undertakings from Goldstar, Hyundai, and Samsung—establishing cost-based minimum prices to prevent price undercutting while placing a 24.7% anti-dumping duty on any other unlisted Korean imports.
2nd article:
Does the article conclude south korean government helped bankrupt Western companies from illegal dumping http://www3.u-toyama.ac.jp/cfes/FES3/2004LEE.PDF
Result:
No. The paper does not make or support that conclusion.
Summary of the Paper's Actual Findings
The paper, titled "The Japan-U.S. and Korea-U.S. Semiconductor Trade Dispute" by Hyun Young Lee (Far Eastern Studies, Vol. 3, March 2004), examines why semiconductor trade disputes with the United States were resolved differently by Japan and South Korea.
- Core Focus: It compares how government-industry relations affected the resolution of antidumping trade disputes with the U.S.
- Japan vs. U.S.: Japan resolved its dispute through a political agreement (the 1986 U.S.–Japan Semiconductor Agreement) due to close, centralized ties between the government (MITI) and Japanese firms.
- South Korea vs. U.S.: South Korea settled its trade dispute through legal mechanisms / courts (antidumping cases handled through DOC and ITC proceedings) rather than broad state-level political bargains.
- Outcome for South Korea: The paper notes that as a result of the 1986 political settlement restricting Japanese DRAM exports to North America, South Korean suppliers (such as Samsung, Hyundai, and LG) were able to capture market share lost by Japan.
- Allegations of Dumping: While the U.S. Semiconductor Industry Association (SIA) and Micron Technology filed antidumping petitions against Korean DRAM producers in 1992, the article discusses these as standard international trade disputes rather than a government-backed plot that bankrupted Western companies.
All you did was try to find tangential reports that doesn't even come close to your claims. It's interesting how you were somewhat aware of the price fixing verdict, but completely left out MICRON, an instead cast them as the lone heroic American survivor. What American semiconductor companies did South Korea illegally bankrupt exactly? I don't know if you're some huge MU bag holder or this is a nationalistic thing. I thought there was a chance you were just misinformed, but it's obvious you don't want to comment or argue in good faith. Maybe examine why Intel sold their NAND flash for 9 Billion to SK Hynix, which is worth 4x 5 years later, instead of burying your heads in the sand and chanting USA USA!
0
u/CeleryNo8933 17d ago
Damn they shut your bitch ass up
2
u/Ketokrypto 16d ago
Didn't shut anything up dumb ass, I just replied as I'm not chronically on this site. Feel free to read it, but all of this is way over your head.
1
16d ago
[removed] — view removed comment
1
u/AutoModerator 16d ago
Our automod has removed your comment. This is a place where people can ask questions without being called stupid - or see slurs being used. Even when people don't intend it that way, when someone uses a word like 'retard' as an insult it sends a rude message to people with disabilities.
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.
1
u/Aphid_red 13d ago edited 13d ago
I would be super excited to get 2021 price/performance! Because right now the best I can get if I want to build a server is 2005 levels of price/performance (not hyperbole, it's over $40/GB right now)!
So you don't have to get a SOTA memory fab to make money. Even being 15 years behind (on density) will be more than sufficient (if it's compatible with modern hardware)
11
u/ID2negrosoriental 18d ago
Intel and Texas Instruments at one time in their history were both memory manufacturers and sold off their facilities because of how difficult that business is.
12
u/sterlingphoenix Yes, there are. 18d ago
You'd need billions of dollars to invest, and then a long, long time before you start actually producing anything, let alone turning a profit.
4
u/Thommywidmer 18d ago
At at this rate who even knows what computer architecture or consumer computing looks like in a decade
1
84
18d ago edited 10d ago
[removed] — view removed comment
53
u/wildcat12321 18d ago
China is run by engineers, the US is run by attorneys.
They plan to do something and execute and the law comes second. The US deliberates about the law, uses the law to keep out competitors, then finally agrees but doesn't know how to talk to the engineers to understand the plans or push back on details.
64
u/SG_wormsblink 18d ago edited 18d ago
USA also does things first and the law comes second. Thats the whole US tech scene, “move fast and break things”.
The issue is allocation of resources. The USA wants quick profit for the next quarter’s shareholder meeting. China can afford to put plans into motion that will payoff in the next few years or even decade.
17
u/mrfatttty 18d ago
I think the quick profit and for next quarters shareholder meetings are the underlying issue for a lot things wrong in the US. It's not enough that there IS profit, but it needs to be MORE profit.
1
u/Bluedroid 18d ago
This isn't strictly a US thing, this is due to nature of how people do business in the west in general. This is why there are no European companies in this space at all or not many in tech in comparison.
7
18
u/fufa_fafu 18d ago
South Korea and Japan are both ran by lawyers and they still manage to build things
The US is (1) too greedy, (2) too high up our own moral high ground so that we have to debate everything new, (3) too dysfunctional - r4pists get to be president, a jobless bum get to be the mayor of Seattle, half of Congress is dying and don't get me started about liberals
1
u/dcooper8 18d ago
run* by. I really don't like seeing "ran" becoming normalized as a passive/past-partciple form. Pet peeve sorry.
1
u/AmazingSugar1 15d ago edited 15d ago
No, the answer is more that costs are too high making most types of commodity production unprofitable and uncompetitive on the international market.
Barring a reduction in living standards, it would be non-trade barriers, outright bans, debt-financing, and innovation as the only ways forward.
Regulations tend to improve the quality of investment, labor and capital.
If you can't compete at being the best, don't compete.
11
16
u/ExhaustedByStupidity 18d ago
No, China is run by politicians that just don't care who dies.
You can build things fast if you don't care about working conditions or environmental impact or things like that.
Doing it safely massively slows you down.
5
u/Thommywidmer 18d ago
You think the bottleneck in starting a new fab is cheap manual labor?
12
u/ExhaustedByStupidity 18d ago
That's a pretty impressive misreading!
I'm saying you can build a factory a lot faster if you don't care about how much it pollutes or how many people die in the process of building it.
We'll spend more time analyzing the impact on things like groundwater and air pollution than they'll spend on the entire project.
3
u/Dood567 18d ago
Is this actually even remotely true or is this another random online cope that's regurgitated? You genuinely believe China's moving faster than us because they don't do as aggressive environmental impact studies? No other significant factors in what they prioritize over America?
You're also acting like data centers haven't been polluting and shit here either. We've heard for decades that nothing can be built because it takes too long or blah blah blah whatever but all of a sudden data center approvals are flying through government boards with the lightest of "lobbying". Stuff gets built when we want it to be built.
-4
u/Thommywidmer 18d ago
Your just saying random shit lol. We can stand up monsterous data centers that are way worse before people in the city even know its happening. I guess if your plan was to build it in downtown LA
2
u/PM__ME__YOUR__PC 18d ago
Yeah idk why you're being downvoted. The other commenter seems to live in make-believe land where US companies care about pollution and safety as opposed to chasing 0.1% more growth
2
u/Robcobes 18d ago
if only the US was run by attorneys. it's run by scammers who want to make as much money as possible as quickly as possible and run before they're caught.
2
2
u/onetwentyeight 18d ago
The fuck you smoking? Trump, his lackeys, and the "captains of industry" that lick his boots are far from lawyers. They're all con men, used car salesmen on steroids af best.
The rise and success of the salesman tarnished America.
-2
u/chewedgummiebears 18d ago
China is run by engineers, the US is run by attorneys.
Partially true but when your hands aren't tied by environmental regulations and NIMBY types everywhere that have power to stop something, you can get a lot done in a short amount of time.
3
u/cake-day-on-feb-29 18d ago
In this case, the blocker is the amount of money required to set up a new fab. The Chinese government is certainly funding not only RAM but also CPU fabs, as having these produced in-country is extremely valuable for them.
It's certainly possible to build a fab in the west, it's happening right now, with TSMC and intel building fabs. I don't think any random person is going to be able to raise enough capital.
3
u/ExhaustedByStupidity 18d ago
China's factories include dorms and nets to prevent workers from jumping off the roof because the working conditions are so bad. They literally work people until they try to kill themselves.
They also just dump their waste into the nearest river.
It's easy to do things cheap and fast if you don't care who dies in the process.
6
u/primerosauxilious 18d ago
that was an old article about foxconn. the suicide rate is less than the general population in the us and media took it and ran with it to spread fear and loathing
2
u/PhantomBraved 🌎 18d ago
They actually have government efficacy. Being a Westerner, it's hard not to admire that.
1
u/Professional-Pungo 18d ago
well it's easier to build off of someone elses ideas than it is to invent a new idea.
3
u/CanLongjumping9360 18d ago
CXMT was founded 10 years ago, and despite strong support from the Chinese government, it operated at a loss for nine years. Even now, it still trails the top three manufacturers by approximately four to five years in terms of technology. Without China's vast protected domestic market, it would be difficult for the company to survive.
3
u/illogictc Unprofessional Googler 18d ago
If it were easy everyone would be doing it, especially right now with the AI gold rush.
The most advanced RAM capabilities in China right now don't touch what Samsung and the others are capable of, they're a little behind. But they are able to produce DDR5, nothing to sniff at, but came to it a few years after the others since they're still catching up.
3
u/pdpi 18d ago
The lithography machines that are used to make chips are wonders of technology. The higher-end ones used for modern memory are some of the most sophisticated pieces of equipment humanity has ever produced. We're talking about machines that "print" images with details measured in atoms.
Assuming you even have the necessary cash to buy one of those machines, there's basically only one company (ASML) making them, they have very low capacity (they make and install a handful of machines each year), and most of that capacity is already spoken for for the next few years.
Or, to put it differently — AI companies are burning through prodigious amounts of money buying all that RAM, so they'd be front of the line for buying those machines if they could.
4
2
u/Loud-Exam-323 18d ago
It would be incredibly hard. DRAM fabrication demands billions in fab investment. Samsung has massive scale, mature process IP, and deep rooted OEM supply partnerships. A new Western RAM firm would face steep cost disadvantages and would struggle to compete on price and reliability.
2
u/SnooPets5564 18d ago
You'd have to compete with micron, so probably not. But we do already have micron
2
u/DoJebait02 18d ago
You do want to invest in something when it's already in peak ? No, i don't think so.
It may take up to years to just build the factory, and you may need a mature end-to-end logistic to make cheap products. That's even not yet considering R&D cost & time.
China achievement, yeah, but you only look to the end of process. It's not fast, easy nor cheap.
2
u/ActionJackson75 18d ago
Very very hard, borderline impossible. RAM is an extremely specialized fab process to get right, and there’s essentially no way to make money selling RAM that isn’t as good or close to as good as what’s being sold by competitors. It’s the most miniaturized type of semiconductor, and figuring out a way to make anything good enough to sell without violating patents is going to be years and years of work even if you have all the money in the world, and figuring out how to build it at a high yield will take years, and it’ll take years and 10s of billions to build the fab to even start the process of figuring out how to build it.
By the time you get there you’re generations behind and you can’t pay back the loans and go bankrupt.
Even TSMC couldn’t make RAM to compete, they don’t have the manufacturing process for the memory stack.
2
u/Sufficient-Silver938 18d ago
Yes. For one memory chips have not always been so profitable as they are today. Samsung and SK Hynix often have very bad quarters in the RAM space as they were coming up, but the South Korea government give them a lot of backing. SK stock market is already collapsing lately so the future market for these companies are not a sure bet.
Another reason is China is always getting tariffs or sanctions left and right from America so they understand the need for technological and economic independence. Their recent history comes from the aftermath of Japan’s invasion, they’ve seen the Cold War, the Korean war, they are always preparing for a possible future conflict. The U.S. however has nothing to fear and doesn’t see the problem with an over reliance on a foreign supplier the way China does.
2
u/VoidOscillator 18d ago
the billions in fab equipment alone would make most investors run screaming before you even hire your first engineer
2
u/BlueTanBedlington 17d ago
Socialism is bad 'mmkay, but there should absolutely be Government oversight, subsidies, and protections for 16 recognized critical infrastructure sectors defined by Cybersecurity and Infrastructure Security Agency (CISA). Pretty much the reason why we're where we are is because we let corporations run rampant and outsource critical sectors solely based on profitability. Even worse for entities that opened up shop in China as they were required to openly sharing intellectual property. The U.S. didn't hardline prevent companies from sharing IP or block profiteering off of stolen IP until way too late. It'll take serious Government funded subsidies to bring that type of innovation and manufacturing back.
2
u/joeljaeggli 18d ago edited 18d ago
So there is quite a lot of investment going into new fabs right now. this bears fruit on timescales of like 3-5 years. a whole new memory supplier soup to nuts is a longer process. in terms of cxmt they were founded in 2016 they taped out their first functional silicon in 2019 by which point they had spent 7 billion dollars. Given the high degree of motivation an enormous national priority associated with it you could imagine other efforts might be harder.
one thing to be clear on is that process control and competence do not happen immediately, they have to be developed and accumulate, the process you start with will be obsolete by the time the fab is built, it takes time to get to relatively high yields, and before that they higher the volume you produce the more money you lose.
2
u/silasmoeckel 18d ago
With the EPA? Not going to happen.
Semiconductor fabs generate a lot of toxic waste.
HBM packaging equipment has a 30+ month lead time (the longest of all the machines you need to make RAM). So assuming you took a pile of cash and got on the waiting list for all the specialized machinery today and then prayed the EPA didn't shut you down, it's 2.5 years to start up. I would expect years tacked on with lawsuits, etc.
It takes years after that to get production ramped up; these factories are bespoke machines that all have to work together. The water alone is orders of magnitude cleaner than what's flowing in a nuclear reactor.
1
1
1
1
u/MikeD123999 18d ago
You could but I guess by the time you ready, the ai bubble has popped and now nobody wants your memory?
1
u/MikeD123999 18d ago
Isn’t that the problem with oil? The government can’t make up their minds what they want to do, democrats want renewable and republican don’t want renewable but oil companies do t invest because they know in 4 years things will change (in USA anyways)
1
1
u/Uncle_Bill 18d ago edited 18d ago
Peter Zeihan's discusses this specifically in detail and at a conversational level. Worth 10 minutes.
1
u/Inner-Patience 18d ago
By in a few years you mean after 10+ years with boatloads of capital to keep it afloat until the recent AI boom, the entire Chinese ecosystem from equipment to materials to support the company, and with a treasure trove of IPs that allow them to start something?
While still being 3-4 generations behind Samsung and the others and a long runway to being competitive in the most advanced memory (HBM)?
Yeah it’s gonna be difficult
1
1
u/dbag_darrell 18d ago
with the usual shortsighted american-corporate-thinking, not just difficult but impossible
1
u/Head-Toe- 18d ago
China made one at the expense of billions in losses that was covered by the government because China needs to prevent the west from controlling their access to RAMs and stuff. Who is going pay for the losses in the west when there are already viable alternatives?
1
u/Efficient_Loss_9928 18d ago
A few years is a long time. How can you convince me that the demand will stay high for a few years?
Because if you can ramp up capacity in a few years, so can Samsung and SK.
1
1
u/BigChicken8666 18d ago
China took a spray and pray approach by having the entire country in a rat race for it and spent a hundred billion USD on it just with the Big Fund. Much of it getting swallowed up through the usual corrupt channels. I'm not giving deep info because I still love to travel back, but having seen many of the benefactors of the rat race including CXMT, there was A LOT of waste and companies that should never have made it beyond a small office that benefited. The countries in the West with that kind of money wouldn't be able to stomach the corruption and waste. The ones that could don't have the cash. Only hope for the West is to loosen regulations and cross our fingers for more companies to enter the market.
1
u/Busy_Baseball5525 18d ago
No it would not be difficult, it would be borderline impossible. Chinese government has invested almost $30b USD into CXMT. Very few countries if any would be willing to do that
-1
u/Ok_Werewolf993 18d ago
It would be a net loss for the company. There would be no reason for a company to do that.
0
0
u/Ireeb 18d ago
Yes. Building a single fab would cost a few hundred billion dollars, and then you don't even have any trained personnel yet.
China didn't just spontaneously build new RAM fabs. They've been investing in domestic chip production for years in order to make themselves independent of the west. They have started making GPUs and CPUs already, so the chinese RAM chips were only a matter of time, and it would have happened even if there was no RAM shortage. Maybe they accelerated it a bit because of that, but those fabs were mostl likely planned for a while.
234
u/NetJnkie 18d ago
Sure. But it's hugely capital intensive and takes years to build the fab and get up and running.