Unlike past cycles driven solely by new demand (e.g., mobile phones), the current AI memory super cycle is different. The new demand driver, HBM, actively constrains the supply of traditional DRAM by competing for the same limited wafer capacity, intensifying and prolonging the shortage.

The growth of AI is constrained not by chip design but by inputs like energy and High Bandwidth Memory (HBM). This shifts power to component suppliers and energy providers, allowing them to gain leverage, demand equity, and influence the entire AI ecosystem, much like a central bank controls money.

The current AI moment is unique because demand outstrips supply so dramatically that even previous-generation chips and models remain valuable. They are perfectly suited for running smaller models for simpler, high-volume applications like voice transcription, creating a broad-based boom across the entire hardware and model stack.

The AI boom is creating a supply chain crisis for PC manufacturers. The massive demand for GPUs and RAM from the AI industry is driving up component prices, directly threatening the affordability and profitability of Razer's core gaming laptop business.

Unlike standard DRAM where products are standardized, HBM is less of a commodity. The complexity of manufacturing HBM—stacking multiple dice and advanced packaging—allows suppliers to differentiate on technology, yield, and thermal performance, giving them a competitive edge beyond just price.

Producing specialized High-Bandwidth Memory (HBM) for AI is wafer-intensive, yielding only a third of the memory bits per wafer compared to standard DRAM. As makers shift capacity to profitable HBM, they directly reduce the supply available for consumer electronics, creating a severe shortage.

Despite record profits driven by AI demand for High-Bandwidth Memory, chip makers are maintaining a "conservative investment approach" and not rapidly expanding capacity. This strategic restraint keeps prices for critical components high, maximizing their profitability and effectively controlling the pace of the entire AI hardware industry.

A key component of NVIDIA's market dominance is its status as the single largest buyer (a monopsony) for High-Bandwidth Memory (HBM), a critical part of modern GPUs. This control over a finite supply chain resource creates a major bottleneck for any potential competitor, including hyperscalers.

The intense demand for memory chips for AI is causing a shortage so severe that NVIDIA is delaying a new gaming GPU for the first time in 30 years. This demonstrates a major inflection point where the AI industry's hardware needs are creating significant, tangible ripple effects on adjacent, multi-billion dollar consumer markets.