- Nelson Duann is a VP at Silicon Motion, a manufacturer of SSD controllers
- In an interview, Duann made it clear that the strategy of Chinese memory chip makers is different from foreign suppliers
- They are required by the government to support the local market, and this could be bad news for theories that these chip makers are helping to ease the RAM crisis globally
Chinese memory chip makers have been theorized by some as coming to the rescue in the global battle against the RAM crisis, but a new report casts that idea in a more dubious light.
Tom’s Hardware interviewed a VP 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 that of foreign memory vendors. Because they receive government subsidies, they also have a responsibility to help maintain the health of the local market.”
In other words, the big memory chip manufacturers in China – like 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.
This means that while they may want to sell to data centers and grab the 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 the same because the government can provide guidance and encourage them to support certain local industries.”
Duann also recently shared a pessimistic view of SSDs and how the consumer market for these products has all but disappeared.
Analysis: domestic protection
The result is that Chinese consumers may not face the same RAM crisis-related price problems as the Western world given this government stance. There is a level of domestic protection built into the system here that puts people above profit in fundamental terms. (And also protecting jobs in manufacturing companies that make products that need these 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 around the globe, given that production is seriously ramping up in the country to cope with the memory shortage.
We’ve even seen some evidence that this has happened. These are just hints (regarding 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 worsen (many predict it will, and that this misery could last until the end of the decade, a view to which Nvidia’s CEO subscribes), there is every possibility that China will ensure that production is aimed at solving the problems on its doorstep. No matter what lucrative temptations might be waved at the big Chinese memory chip manufacturers.
This is all 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 in that direction.
On the brighter side, we heard this week that we’re going to see Apple wade in and empty some of its massive coffers in an attempt to address the memory shortage in some way, though exactly how that might pan out isn’t at all clear yet.
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