Elon Musk says memory supply is tight for sure in 2027 but China could change the picture in 2028, as Michael Dell warns of a worsening crunch
@zerohedge For sure in 2027, but if China ramps LP5 & LP6 as fast as they’ve ramped other manufactured products, then 2028 will be a different story. HBM is a tougher hill to climb, however.
Context
Memory chips are a key constraint on AI servers and PCs, and comments from Musk and Dell suggest shortages and high prices could last years.
Musk's post is a first hand reply to zerohedge, which was relaying a Wall Street Journal report on Michael Dell's comments with a joke about Apollo. The WSJ article was paywalled, so details come from summaries of it.
Deep dive
On October 16, zerohedge posted that Michael Dell expects the memory crunch to get worse, citing the Wall Street Journal, and joked that Apollo would raise a pension fund filled special purpose vehicle for anyone trying to buy a Dell XPS laptop.
Elon Musk replied: For sure in 2027, but if China ramps LP5 and LP6 as fast as they have ramped other manufactured products, then 2028 will be a different story. He added that HBM, the high bandwidth memory used in AI accelerators, is a tougher hill to climb. LP5 and LP6 appear to refer to LPDDR5 and LPDDR6 low power memory.
Reports summarizing the Journal story say Dell expects chip shortages to become more severe in 2027 as AI demand outpaces supply, and that the shortage could last about four years because new factories take roughly that long to build. CRN quoted Dell describing a structural shortage in the AI driven compute market.
On October 13, Musk praised Micron for being reasonable on future memory prices while calling other memory makers extortionate, as covered in that day's deck.
What to expect next
Watch memory price trends and whether Samsung, SK Hynix and Micron announce faster capacity expansions to ease the shortage.
Also watch whether Chinese memory makers such as CXMT ramp low power DRAM as quickly as Musk suggests, how US export controls affect that, and whether PC and phone makers raise prices again because of memory costs. Dell's next earnings call may give more detail.