Wiki/History
Prior DRAM cycles
Five cycles, each one ending in producer pain. The current "discipline" doctrine is a direct response to this list. The pattern: capacity overshoot → ASP collapse → losses → exits or consolidations.
1995–1996
- Price collapse: 16Mb DRAM spot prices fell from ~$50–55 per chip in early 1995 to under $10 by end of 1996. Roughly an 80% decline.
- Driver: Windows 95 demand overshoot, plus Korean/Japanese/Taiwanese capacity additions and 16Mb yield improvements arriving simultaneously.
- Industry effect: Worldwide semiconductor revenue down ~9% in 1996, almost entirely from DRAM (Dataquest, Jan 1997).
- Exits triggered: TI's eventual exit from DRAM (announced June 18, 1998; sold to Micron) traces back to 1995–96 losses. Multiple Japanese producers began consolidation talks.
Primary sources to pull: NYT / WSJ archive (Andrew Pollack covered the collapse); Micron 8-K June 1998 for the TI fab transfer.
2001–2002 — the DOJ price-fixing cartel
The best-documented cycle. After 1995–96 left the industry with chronic overcapacity, surviving producers conspired to fix prices to OEMs.
- Conspiracy period: April 1, 1999 – June 15, 2002, per DOJ charging documents.
- OEM victims named in the Samsung charging document, verbatim: "Dell Inc., Compaq Computer Corporation, Hewlett-Packard Company, Apple Computer Inc., International Business Machines Corporation, and Gateway Inc."
- US DRAM market context (per DOJ release): "approximately $7.7 billion in DRAM sales in the United States in 2004."
DOJ guilty pleas and fines (all DOJ Antitrust Division press releases):
| Date | Company | Fine |
|---|---|---|
| Oct 2004 | Infineon | $160M |
| Dec 2004 | 4 Infineon executives | $250K each + 4–6 mo prison |
| May 2005 | Hynix | $185M |
| Oct 13, 2005 | Samsung Electronics + Samsung Semiconductor (US) | $300M |
| Jan 2006 | Elpida | $84M |
As of the Oct 13, 2005 DOJ release announcing Samsung's plea: cumulative fines from three companies and five individuals totaled "more than $646 million." Subsequent pleas brought the cumulative total above $700M. Samsung's $300M was, per DOJ, "the second largest criminal antitrust fine in U.S. history and the largest criminal fine since 1999." The often-cited "$730M Samsung fine" is incorrect — $300M is Samsung's individual fine; ~$731M is the rough aggregate across all defendants.
Civil follow-on: In re Dynamic Random Access Memory (DRAM) Antitrust Litigation, MDL 1486, N.D. Cal. — settlements totaled >$300M. Docket on PACER.
The plea agreements (filed N.D. Cal., available on PACER) contain the agreed factual basis: conspirators met and communicated by phone and email to fix prices. This is the cycle that ended the industry's tolerance for behavioral coordination — and pushed it toward the structural discipline (capex restraint, public discipline framing) seen today.
2008–2009 — Qimonda
- Qimonda AG insolvency filing: January 23, 2009, Munich district court (Amtsgericht München). Qimonda was the Infineon DRAM spinoff (IPO Aug 2006, NYSE: QI).
- Capacity removed: Qimonda was ~10% of global DRAM bit supply at peak. Richmond, VA fab closed October 2008 (before the bankruptcy); Dresden 300mm fab assets sold piecemeal 2009–2010.
- Pricing context: DDR2 1Gb contract prices fell from ~$2.30 mid-2007 to ~$0.80 by late 2008.
Primary sources: Qimonda press release Jan 23, 2009 ("Qimonda Files Application for Opening of Insolvency Proceedings"); Qimonda 20-F filings; NYSE delisting notice Feb 2009; Infineon 6-K Jan 2009.
This is the single most-cited prior-cycle datapoint for "what producers remember." A major Western DRAM maker, well-capitalized, technologically credible, gone in a single quarter when the cycle turned.
2012 — Elpida
- Filing: Feb 27, 2012, Tokyo District Court, under Japan's Corporate Reorganization Act. Largest manufacturing bankruptcy in Japanese history at the time.
- Resolution: Micron sponsorship agreement July 2, 2012 (Micron 8-K). Acquisition closed July 31, 2013, ~$2.5B net of cash and assumed obligations.
Elpida's exit consolidated the merchant DRAM industry to Samsung / SK Hynix / Micron as the Big 3, with a small Taiwanese tail (Nanya, Winbond, PSC). That structure has held for thirteen years.
2018–2019
- ASP decline: DDR4 8Gb contract prices fell from ~$8.00 (peak Q3 2018) to ~$2.80–3.00 (trough mid-2019). Peak-to-trough ~50–60%.
- Producer impact: Samsung Semiconductor division operating profit fell from KRW 13.65T (Q3 2018) to KRW 3.4T (Q2 2019). SK Hynix operating income fell from KRW 4.4T (Q3 2018) to ~KRW 0.5T (Q2 2019).
- China antitrust probe: May 31, 2018 — SAMR (State Administration for Market Regulation) announced antitrust investigation of Samsung, SK Hynix, and Micron. Probe never produced public penalties; quietly faded.
- Capex cuts: Micron ~$1.25B cut + 5% DRAM wafer-start cut (Sept 26, 2019). SK Hynix 2020 capex reduction + M10 fab idling (Oct 24, 2019). Samsung was the late capitulator — did not formally announce DRAM cuts, reiterated supply discipline on April 30, 2019 Q1 call.
The 2018–19 cycle is the immediate template for the modern discipline doctrine. It taught the producers that a single oversupply quarter wipes out a year of profit, and that all three producers cutting is the only way to defend pricing.
2022–2023
The most recent cycle. Quarterly loss magnitudes are the load-bearing evidence for "we did the cut, took the losses, will not repeat":
Micron
- Q2 FY23 (March 28, 2023): GAAP operating loss ~$2.31B on revenue $3.69B (down 53% YoY). Inventory writedown ~$1.43B.
- FY23 full year: GAAP net loss ~$5.83B — Micron's largest annual loss ever.
- Nov 16, 2022 capex cut: FY23 capex cut ~30% to ~$8B; DRAM/NAND wafer starts cut ~20%.
SK Hynix
- Q4 2022 (released Feb 1, 2023): First quarterly operating loss in 10 years — KRW 1.7T.
- Q1 2023 (April 26, 2023): Operating loss KRW 3.4T (~$2.5B).
- 2023 full year: Operating loss KRW 7.7T.
Samsung — the late capitulator
- Q4 2022 (Jan 31, 2023): Semiconductor division operating profit collapsed to KRW 270B from KRW 8.84T YoY. Did not cut production.
- Q1 2023 (April 27, 2023 earnings call): Samsung finally announced "meaningful" memory production cut. First explicit production-cut acknowledgment in years. This is the dateline for the Samsung capitulation.
- 2023 full-year DS-division operating loss: KRW ~14.9T.
The consolidation arc
| Year | Event |
|---|---|
| 1998 | TI exits DRAM → sold to Micron |
| 1999 | NEC + Hitachi DRAM merge → form Elpida |
| 1999 | Siemens spins off Infineon (incl. DRAM) |
| 2001 | Toshiba exits commodity DRAM → sold Dominion fab to Micron Dec 2001 |
| 2003 | Mitsubishi DRAM folded into Elpida |
| 2006 | Infineon spins off Qimonda |
| 2008 | Qimonda Richmond fab closure (Oct) |
| 2009 | Qimonda insolvency (Jan 23) |
| 2012 | Elpida bankruptcy (Feb 27) |
| 2013 | Micron acquires Elpida (July 31) |
Approximately 20+ DRAM makers in the mid-1990s. Three majors + three minor (Nanya, Winbond, PSMC) today. CXMT (ChangXin Memory Technologies, China) is the wildcard new entrant — the only meaningful capacity addition outside the Big 3 in fifteen years.
Why this list is load-bearing for the current cycle
Every public statement of "capex discipline" by Mehrotra, Kwak, and Kim is a reference to this list. The producers do not talk about it explicitly because they don't have to — investors remember Qimonda. The current discipline doctrine is not a stated preference. It is the equilibrium response of a three-firm oligopoly that has watched two of its peers die in living memory of every senior executive on the calls.
See supply/capex-discipline.md for the present-day quotes that close the loop.