The memory industry saw a rollercoaster ride in the past few weeks following the debut of Google's TurboQuant, but the idea of shortages being over is seen as a "misinterpretation", to say the least.
Google's TurboQuant Isn't Slowing Down the Memory Supercycle At All; the Demand Will Stay For Several Quarters
With DDR prices coming down over the past few days, we did discuss the role of Google's TurboQuant algorithm; however, tying it to the end of memory shortages was a mere misperception, according to The Financial Times' latest report. Following the blog post about TurboQuant, we saw a huge sell-off in the memory market, affecting suppliers like Micron, Samsung, and SK hynix, and it instilled widespread panic, not just among retailers but also RAM scalpers, who thought it was finally the end of DRAM inflation. However, recent indicators, including revenue figures and the demand outlook, suggest that shortages are here to stay.
We never imagined that a technology that started from the academic question of ‘How can we compress data more perfectly?’ would cause such a huge social and economic ripple effect.
- Han In-su via Financial Times
While going into the technical details of TurboQuant would make this coverage much longer, the idea with the compression algorithm is to run LLMs on accelerators while reducing memory consumption, thereby making memory use much more efficient. Many experts have drawn a TurboQuant analogy with Jevon's Paradox, but in terms of actual memory demand, it appears the cycle is now transitioning from aggressiveness to broader adoption and, indirectly, longer as well. This is clearly seen in how DRAM suppliers are now entering into multi-year contracts with hyperscalers to gain a clearer view of demand.
In Samsung's recent Q1 revenue report, we saw the company generate up to $37 billion from its DRAM segment alone, with operating figures on par with those of mainstream hyperscalers. At the same time, it is reported that DRAM contract pricing is expected to grow in the upcoming quarters, and that memory is now entering a phase in which no entity in the AI world can 'survive' without it. Dell's CEO, Michael Dell, recently noted that demand could skyrocket to unprecedented levels, driven by a dramatic rise in per-processor memory consumption.
The only situation in which we could see memory shortages easing is when new production capacity comes online, since demand is unlikely to drop. From this perspective alone, memory shortages could persist through H2 2027 and even beyond, depending on how quickly suppliers can bring new production lines online.
About the author: Muhammad Zuhair is a hardware and technology reporter for Wccftech, specializing in the semiconductor industry and the complex interplay between technology, manufacturing, and geopolitics. His coverage focuses on the corporate strategies and technological roadmaps of industry giants like TSMC, NVIDIA, Samsung, and Intel. Zuhair's expertise lies in deconstructing complex topics such as fabrication nodes (e.g., 2nm process), the economic impact of policies like the CHIPS Act, and the strategic development of AI infrastructure from NVIDIA, AMD and Intel.
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