The New Boss is a Script
... CNBC reports, "Neocloud companies CoreWeave and Nebius were each down about 8%, while memory makers SanDisk and Western Digital sank 7% and 9%, respectively." The companies are unable to meet the demand for memory chips due to a massive strategic reallocation of production capacity toward high-margin AI components, combined with long lead times for new manufacturing facilities. 1. AI Demand Dominance: AI data centers are consuming an estimated 70% of all memory chips produced globally. Hyperscalers like Meta, Google, and Microsoft have secured long-term contracts, prioritizing their orders over those for consumer devices. 2. Production Shift to HBM: Manufacturers (Samsung, SK Hynix, Micron) are shifting production from conventional DRAM and NAND (used in phones and laptops) to High-Bandwidth Memory (HBM), which is essential for AI accelerators and offers three to five times higher profit margins. 3. Capacity and Investment Constraints: The industry underinvested in new ...