Core Insights - The announcement of price increases by Raspberry Pi is attributed to a significant rise in memory costs, which have increased by approximately 120% compared to a year ago [1] - The surge in storage prices is driven by a combination of cyclical trends in the storage manufacturing industry and an unprecedented demand from AI and large-scale data centers [2][3] Group 1: Price Trends - The price of 512Gb TLC NAND flash memory has more than doubled in six months, with contract prices following suit [2] - By early 2024, the price of Western Digital's 2TB Black SN850X exceeded $150, while Samsung's 990 Pro 2TB rose from around $120 to over $175 [2] - DRAM prices are expected to increase significantly, with a forecasted rise of 38-43% for PC-grade DDR4 products by Q3 2025 [2] Group 2: AI Demand - The demand for memory and storage is primarily driven by artificial intelligence, which requires vast amounts of DRAM and flash storage for training and deploying large language models [3] - OpenAI's recent agreement with Samsung and SK Hynix for the supply of up to 900,000 DRAM wafers per month highlights the scale of procurement, representing nearly 40% of global DRAM production [3] Group 3: Supply Chain Dynamics - Storage manufacturers are cautious due to past cycles of overproduction and price crashes, leading to a shift in capital expenditure towards high-margin products like HBM [4] - The production lines for DDR4 are closing faster than the decline in demand, resulting in simultaneous supply constraints for NAND flash and hard drives [4] - Western Digital has already notified partners of a 5-10% price increase for hard drives due to supply shortages [4] Group 4: Future Outlook - The construction of new wafer fabs is a potential solution to supply issues, but it requires substantial investment and time to reach production scale [6] - Geopolitical factors complicate the supply chain, particularly affecting the supply of rare earth magnets used in hard drives [6] - The era of ultra-cheap PC upgrades may be coming to an end, with businesses needing to prepare for larger infrastructure budgets as storage prices are expected to remain high until 2026 and beyond [6]