Predictions

 In the middle of December I emailed my good buddy out in Nova Scotia and told him this :

"At this festive time of the year I should let you know of something that has been festering for the last month or so, perhaps a "too late" timely comment, which may still be in time, depending on which way you see it. A little background, something that has not affected you and would never have, during the covid years video cards, GPUs, increased dramatically in price because of a perfect storm of high demand and for many reasons, supply issues. They went up 200% to 300% and the cynical amongst us acknowledged that the industry was taking advantage, of course, greed was also a factor with consumers. This would not have been on your radar because of your computing requirements.

Fast forward to a chilling announcement just a few weeks ago from Micron, they announced that they are exiting the consumer market for ram, specifically modern ram like DDR4 and DDR5. The big three memory companies are Micron, Samsung and SK Hynix, basically those three supply most of the planet's memory products, which is a factor in absolutely everything, everything. What Micron has done, and the other two companies will surely follow, have shifted from consumer products to chasing high bandwidth HBM customers, mainly data centres, bitcoin conglomerates, AI processing plants, all of which are seeing trillions of dollars of governmental funding. 

The effect of the announcement on the 3rd December has caused memory products to spike 300% or more in the consumer market, a budget-friendly 32GB kit of DDR5 in September would have been $95 and today is around $440, this being is seen across all memory products and I consider will be irreversible by February when Micron (and probably the others) will pull the plug. I say memory products because it will affect SSD drives, GPU prices and the sinister aspect is that everything that uses silicon will be affected by this "AI Squeeze" which is planes, trains and automobiles, dishwashers, consumer electronics, everything.

So, back to my point. If you think you will be in the market for a new computer at some point in 2026 or 2027 you should consider that this is a sweet spot to buy existing inventory from a company like Dell Refurbished." 

At that point I linked him to a Dell Precision 5820 Tower workstation, at the time the price was $419 that was a screaming deal, the workstation class machines exceptional in specifications, it was an "A" condition machine, they had 31 units left and I was tempted to buy one myself.  Windows 11 Pro, 16GB DDR4, 11th generation Intel, 500GB SSD. When you added tax and shipping, the workstation was $500 which was a great price.

Two weeks later, they have none.

Sure, they will have more, I hope, but it is a sign that "hot cakes" need to be bought. If I think this way, all the other lemmings will be thinking the same way, prices will rocket in 2026 and there will be no going back, that is the way the market works, in my tiny world, used DDR4 prices have gone up a lot in the last month, that is because the word is out, sellers are selling for more, because buyers are paying more. 

The question is, this inflationary process, is it real?

I can answer that question somewhat, but it might go around the houses. One reference is part of the same "wave" that is still part of the process, but it was exacerbated by covid, starting around 2020 GPU prices shot up because of scarcity in supply chains, lockdowns, "FOMO" fear of missing out (by gamers) and demand by data centres and crypto miners, oh, and good old fashioned human scalping of prices. This trickled into the used market as well and it was a great time to sell, but not to buy.

There was a period when things improved, sort of in the middle, manufacturers sorted themselves out, consumers calmed down, however, one thing that was evident, MSRP had increased across most of electronics, you name it, it had gone up and as we all know, prices of everything else went up and there is little sign of things ever coming down again.

They say that for electronics (which are in everything) there is a hidden "AI Tax" that pervades all things and in the last couple of years, AI has become an obsession, not only in industry but also from government and in the last month or so, manufacturers seem to be abandoning the consumer, the little guy, the hobbyist, in favour of the big guys, the data centres and the crypto complexes. It is perhaps wrong to call what NVIDIA and it's competitors are creating video cards or GPUs now, they are data processing units, or DPU and like the NVIDIA Tesla units from back in 2007 they do not need video output.

This is the round the houses bit, the NVIDIA Tesla C870 was a "headless" GPU and was officially called a GPU Computing Processor, their sole purpose was to act as a co-processor for heavy math rather than driving a monitor, the physical video ports were removed, but the manufacturer still referred to them somewhat as GPU. That was in 2007 and flash forward to today and the wider industry are producing more headless GPUs now than at any other point in their history and they are no longer marketed to gamers or even standard workstation users; they have become the backbone of the global AI and Data Center industry.

NVIDIA and the other two GPU manufacturers sell 90% of their product into the industry, it is also true that Samsung, SK-Hynix and Micron sell about the same percentage, of course they sell to NVIDIA and the other GPU manufacturers, they also sell to consumer electronics companies, the automotive industry, aerospace and the good old AI and Date Center industry, theres a lot of imbreeding going on. 

I will stop the bus and get off, enough round the houses for this diatribe.

When one of the three, Micron, made their announcement that it would exit the consumer market, it signalled a chilling warning of things to come, DDR5 prices doubled in the following weeks and scalpers raised their little heads once again, on the used market, DDR4 prices have also risen. The longer term consequences are that world demand for high speed ram is rising rapidly and the supply chains are being choked once again, after all, NVIDIA and AMD and INTEL have to buy all the ram for their headless chickens, some with as much as 288GB of HBM3e memory (High Bandwidth) and they will all be competing for it, prices will rise to the stratosphere until Skynet becomes sentient and we all say goodbye as the internet stops being of all the things and just of one thing, called AI.

I will continue here on the OTG until then, please stay tuned, normal service will resume shortly.