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How memory chips are made is right there in textbooks. Yet only three companies make them at scale: two in South Korea, one in the US. Samsung, SK hynix and Micron sell over ninety percent of it. Everyone is scrambling for memory right now. So why doesn't anyone else jump in? Because knowing the recipe and affording the kitchen are two different things. There are four hurdles at the door.
Hurdle one: money. Micron's new memory plant in the US was planned at fifteen billion dollars. And that's just one plant. You pour all the money in first, and only years later sell your first chip. Hurdle two: machines. The tiny cells that hold data are thousands of times thinner than a hair.
To draw lines that fine, you need a machine like a super-precise projector that prints the pattern onto silicon. The most advanced kind is made by just one company in the world, in the Netherlands. Each one costs about two hundred million dollars. Hurdle three: craft. Textbooks only tell you roughly how it's done. The hard part hides in hundreds of steps.
Memory chips from over thirty years ago already took four hundred steps. Today it's even more. Suppose each step goes right ninety-nine percent of the time. After four hundred steps, fewer than two percent come out good. The exact temperature and timing of every step are secret recipes each company spent decades working out. They're not in any textbook.
Hurdle four: endurance. Memory prices ride a roller coaster: shortages send them soaring and everyone builds more plants; then a glut sends them crashing. In the 2008 crash, everyone was losing money and hanging on. The next year, Germany's Qimonda went bankrupt. In 2012, Japan's Elpida, then the world's third largest, went bankrupt too.
The ones that survived are today's big three. A newcomer has to clear all four hurdles at once, and get lucky with timing. Some are trying. China's CXMT grew its share from three to five percent in a year. So as AI gobbles up memory, prices have doubled. Micron's new plant won't start making chips until 2027.
Next time memory makes your phone or laptop pricier, these four hurdles are why. What else makes you wonder why only a few can make it? Tell me in the comments.
Knowing the recipe
isn’t the same as
affording the kitchen.
How memory chips (RAM) work is in the textbooks. The hard part is making huge numbers of them, well and cheaply. Only three companies really manage it: Samsung and SK hynix in South Korea, and Micron in the US. Together they sell over 90% of it.
Put simply: lots of people can write a recipe. Very few can run a giant restaurant chain.
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