- Nelson Duann is vice president of Silicon Motion, a manufacturer of SSD controllers
- In an interview, Duann made it clear that the strategy of Chinese memory chip manufacturers is different from that of foreign suppliers.
- They are obligated by the government to support the local market, and that could be bad news for theories about these chipmakers helping to alleviate the global RAM crisis.
Some have theorized that Chinese memory chip makers are coming to the rescue in the global battle against the RAM crisis, but a new report puts that idea in a more dubious light.
Tom’s Hardware interviewed a vice president at Silicon Motion, a manufacturer of SSD controllers, and Nelson Duann told them that: “China has domestic NAND and DRAM manufacturers, and their strategy is not the same as foreign memory suppliers. Because they receive support from the government, they also have a responsibility to help maintain the health of the local market.”
In other words, major memory chip producers in China, such as CXMT (which we hear about most often) and YMTC, cannot simply sell to the highest bidder, as they are pressured by the government (local or national) to support domestic manufacturers of system RAM and SSDs, or even phones and PCs.
That is, even if they want to sell to data centers and obtain higher profits, they cannot.
Duann notes: “Overseas suppliers typically look for the highest-yield opportunities and may allocate most of their supply to data centers. Chinese suppliers cannot do the same because the government can provide them with guidance and encourage them to support certain local industries.”
Duann also recently shared a pessimistic line of thinking about SSDs and how the consumer retail market for these products has almost completely disappeared.
Analysis: internal protection
The result is that Chinese consumers may not face the same pricing issues related to the RAM crisis as the Western world, given this government stance. There is a level of internal protection built into the system here, which puts people above profits in basic terms. (And also protect jobs at manufacturing companies that make products that need those memory chips, from RAM to laptops.)
What’s interesting to consider here is the theory, which has been floated for some time, that Chinese-made memory chips could be used to serve consumers around the world, given that production is seriously ramping up in the country to address the memory shortage.
We’ve even seen some evidence of this happening. These are mere hints (in terms of Corsair possibly experimenting with using chips made by CXMT), but Duann’s comments raise a potentially serious hurdle.
If the RAM crisis continues to worsen (many predict that it will, and that this misery could last until the end of the decade, a view that Nvidia’s CEO shares) there is a good chance that China will ensure that production is directed to solve the problems on its own doorstep. No matter what profitable temptations may arise before the large Chinese memory chip manufacturers.
This is all just theorizing, but it makes this possible escape route to some relief from the AMR crisis for those outside of China seem a little less likely. And it’s not that there wasn’t already considerable skepticism in that regard.
On the plus side, we heard this week that we’ll see Apple come in and empty some of its vast coffers in an effort to alleviate the memory shortage somehow, although it’s still not entirely clear exactly how that might play out.
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