- Nelson Duann is a VP at Silicon Motion, a maker of SSD controllers
- In an interview, Duann made it clear that the strategy of Chinese memory chip makers is different to foreign suppliers
- They are obliged by the government to support the local market, and that could be bad news for theories about these chip makers helping to ease the RAM crisis globally
Chinese memory chip makers have been theorized by some as riding to the rescue in the global battle against the RAM crisis, but a new report puts that idea in a more doubtful light.
Tom’s Hardware interviewed a VP at Silicon Motion, a maker of SSD controllers, and Nelson Duann told them that: “China has domestic NAND and DRAM makers, and their strategy is not the same as that of foreign memory suppliers. Because they receive government support, they also have a responsibility to help maintain the health of the local market.”
In other words, the major memory chip producers in China — the likes of CXMT (the one we hear about most often) and YMTC — can’t just sell to the highest bidder, as the government (local or national) puts pressure on them to support domestic manufacturers of system RAM and SSDs, or indeed phones and PCs.
Meaning while they may want to sell to the likes of data centers and grab those fatter profits therein, they can’t.
Duann notes: “Foreign suppliers generally follow the highest-return opportunities and can allocate most of their supply to data centers. Chinese suppliers cannot do that in the same way because the government can provide guidance and encourage them to support certain local industries.”
Duann also recently shared a pessimistic line of thinking on SSDs, and how the consumer retail market for these products has almost disappeared entirely.
Analysis: domestic protection
The upshot is that Chinese consumers may not face the same RAM crisis-related pricing woes as the western world given this governmental stance. There’s a level of domestic protection built into the system here, putting people above profits in basic terms. (And also protecting jobs in the manufacturing companies that make products which need those memory chips, from RAM sticks to laptops).
What’s interesting to consider here is the theory, which has been raised for a while now, that memory chips made in China could be used to serve consumers across the globe, given that production is being seriously ramped up over in the country to cope with the memory shortage.
We have 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 stumbling block.
If the RAM crisis continues to get worse (many predict it will, and that this misery might last through to the end of the decade, a view that Nvidia’s CEO subscribes to) there’s every chance that China is going to ensure that production is directed to solve the problems on its own doorstep. No matter what profitable temptations might be waved in the face of the big Chinese memory chip makers.
All this is just theorizing, but it makes this possible escape route to some relief from the RAM crisis for those outside of China seem a bit less likely to happen. And it’s not like there wasn’t already considerable skepticism along those lines already.
On the brighter side, we heard this week that we’re going to see Apple wading in and emptying some of its vast coffers in an effort towards relieving the memory shortage in some way, although exactly how that might pan out isn’t at all clear yet.
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