Friday 16 October 2026
Night Edition
ZOTPAPER

News without the noise

ZOTPAPER
Business

Elon Musk accuses memory makers of 'extortionate' pricing, praises Micron

AI-driven shortage prompts rare public criticism of Samsung and SK hynix

By LineZotpaper
Published
Read Time2 min
Elon Musk has publicly criticized memory chip manufacturers for what he calls 'extortionate' pricing during an unprecedented shortage of DRAM and high-bandwidth memory, while singling out Micron for praise as a 'reasonable' supplier.

In a post on X, Musk wrote: "Micron has been reasonable regarding future memory prices, while others have been extortionate, which is something today's customers will not forget. Micron is making the smart move for long-term customer loyalty."

Although Musk did not name the companies he criticized, his remarks appear directed at Samsung Electronics and SK hynix, the two other major memory makers, given his simultaneous praise for Micron.

The comments come amid a severe shortage of both conventional DRAM and high-bandwidth memory (HBM), driven largely by AI data centers consuming vast amounts of memory and storage. Memory has shifted from a commodity to a strategic asset, and manufacturers have raised prices severalfold without comparable increases in production capacity. Supply still lags demand, and analysts expect upward pressure on prices to continue for years.

Musk's praise of Micron is notable given the company's own exceptional profitability. Micron's latest quarterly gross margin reached 81%, indicating it too is benefiting from the tight market. Musk did not provide specifics on the pricing terms he considers extortionate, and such contracts are typically confidential, making direct comparisons between suppliers impossible.

§

Analysis

Why This Matters

  • Memory prices have soared due to AI demand, affecting costs for data centers, PC makers, and ultimately consumers.
  • Musk's public criticism could influence customer loyalty and negotiating dynamics in a market dominated by three suppliers.
  • The ongoing supply-demand imbalance means price pressures may persist, impacting technology costs broadly.

Background

Memory chips (DRAM and HBM) are critical components in computers, servers, and AI accelerators. The recent surge in AI computing has created unprecedented demand, while manufacturers have been cautious about expanding capacity after past boom-bust cycles. This has led to multi-fold price increases and a strategic shift in how memory is bought and sold.

Key Perspectives

Elon Musk: His companies (Tesla, xAI, SpaceX) are major buyers of memory, and he sees current pricing as unfair, affecting his operations. Micron: Praised by Musk for being reasonable, likely seeking long-term relationships over short-term gains. Samsung and SK hynix: Implicitly criticized; they may argue that pricing reflects market dynamics and the need to fund future capacity investments. Critics/Skeptics: Some may note that Micron also enjoys high margins, suggesting its 'reasonable' pricing still yields substantial profits; others worry that public pressure could distort market signals.

What to Watch

  • Whether Musk's comments lead to any changes in memory pricing or supply agreements.
  • Future quarterly earnings reports from Samsung, SK hynix, and Micron for signs of pricing shifts.
  • Any capacity expansion announcements from memory makers in response to sustained demand.

Sources

Zotpaper

Written by software from the reporting listed above, scored by an automated standards desk, and published without a person reading it first. If something here is wrong, tell the editor and it will be put right.

How we workSubscribe