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Matt Dratch
@DratchCap
Macro Equity PM | Dartmouth Fball โ€™08 โ€œBe bold, and mighty forces will come to your aid.โ€ Views expressed are solely my own and not on behalf of my employer.
๊ฐ€์ž… December 2010
317 ํŒ”๋กœ์ž‰ ์ค‘    8.8K ํŒฌ
Banger from @evergreencap3 ๐Ÿ™๐Ÿ™๐Ÿ™ Iโ€™d add: - Asian funds hate โœ… - Pods are short โœ… - peak this, peak that โœ… โœ… - โ€œdespite being screwed recently on LTAs, all the mgmt teams (and boards) whistled Dixie and signed new ones to get screwed again!โ€ โœ…
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Now is a good time to buy memory stocks. If you want to make a bet on AI, the DRAM companies appear to be some of the most disconnected: high growth, high margins (which will stay well above prior peaks if AI demand holds), critical importance to AI workloads (thereโ€™s no AI without DRAM), concentrated industry structure, increasingly strategic customer engagements, lack of substitutes, and record capital return, all at valuations that embed a sharp cyclical decline sometime between 2027 and 2028. This is despite companies like Google reportedly expressing interest in locking up memory supply through 2035. Additionally, Elonโ€™s comments yesterday were an incremental positive for DRAM. He said Terafab would start with an SRAM chip slated for volume production in 2H28, which is 2029/2030 in Elon-speak. This implies Terafab is still years away and, importantly, will target a logic process first, not traditional memory/DRAM. I believe this is because he understands how difficult it is to manufacture memory from scratch (especially at competitive yields/economics). Only 4 players do it at scale globally, and all are vertically integrated with proprietary IP. I believe this is also why Elon has been pounding the table so hard on volumes coming out of CXMT. Heโ€™s trying to pressure MU/the big 3 to expand capacity too. Ultimately, I think the best outcome for Terafab/SPCX/TSLA and the memory industry is for them to work together. But Terafab is early, as is a lot of what SPCX/TSLA are trying to build, so the DRAM companies are understandably approaching this with care. The worst thing they could do is ramp capacity for the Elon-universe before the actual demand is there and end up oversupplied. Regardless, I hope we eventually see a partnership, especially between Sanjay at $MU and Elon, who were both seated close to President Trump at last monthโ€™s superintelligence summit and are both running American companies that are very pro-American AI/SI.
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