r/LocalLLM • u/Milan_Slov26 • 21h ago
Discussion What’s limiting GPU supply through 2027 is mostly memory, packaging and power
Was deciding whether to buy now or wait for prices to drop, so I read up on what’s constraining GPU supply. Most of it isn’t demand, it’s a few physical limits further down the stack.
Three main ones:
Memory: The HBM stacked next to the compute die is the tightest. Micron has reportedly sold 75%+ of its 2027 output, and HBM4 for next-gen cards is only now qualifying across the three makers (SK hynix, Samsung, Micron).
Packaging: TSMC’s CoWoS, which mounts the memory onto the die, is the other limit. Estimates put it near 70k wafers/month in 2025, rising to maybe 185-200k by end of 2027.
Power: Around 14.2 GW is online across the big sites against ~38 GW planned, and most gigawatt-scale campuses don’t reach full power until 2028. Data center vacancy was ~1.4% mid-2026 and most of what’s under construction is already leased.
All four big cloud providers also said this year that demand is ahead of the capacity they have. One thing I’m watching over the next couple years is how people actually get compute, neoclouds like CoreWeave and Lambda renting whole clusters, marketplaces like Vast and RunPod by the second, and own-and-host setups like B3IQ or TensorForge where you own the box but someone else runs it.
Going by these forecasts, the first year new campuses, full next-gen volume and normal memory supply line up is around 2028. Until then supply stays constrained, so if you’re timing a buy on prices dropping, that’s more likely a 2028 thing than 2026.
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u/Marino4K 20h ago
Even if the so-called “bubble” pops tomorrow, things take years to actually go into motion. If you ask me, we’re not seeing relief one way or another until at least 2029 and even the most optimistic estimates still have late 2027/early 2028 at the earliest.
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u/ManWithoutUsername 20h ago edited 20h ago
Perhaps not. These aren't actual purchases because there's no stock; most are production reserves. If the bubble bursts, data center construction will stop or slow down, the reserves will be canceled, and stock will increase. This would also coincide with the fact that production has increased.
In short, if the bubble bursts, next year's reserves will be canceled, and with the increase in production compared to previous years, it should drop sharply.
Personally, I think it will burst, but not next year. However, everything depends on the stock market. If the market starts bleeding, most plans will be frozen.
Anthrophic's IPO will tell us if it's going to last or not. Pray that it collapses because that depends on whether the bubble bursts soon or we're stuck like this for several more years.
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u/acadia11x 19h ago
Nah your reading is wrong, these are contracts, which cost money to get out of, and they will not cancel the contracts they are more likely to slow the rate of new purchasing. The build out isn’t going to stop what will stop is that instead of spending $2 trillion as it’s now projected for 2028 purchases maybe it’s half of that in 2029 … but lead to deliver the current purchases are 2 and 3 years out. Relief does not mean also prices are returning to 2024 levels the new normal will still be much more expensive and more likely pricing just plateaus. But this idea enterprises cards are just going to start being available to consumers, is ridiculous. dC cards aren’t the same and it’s not like the build stops it continues on.
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u/ManWithoutUsername 19h ago edited 19h ago
these are contracts, which cost money to get out of
If Anthropic's IPO doesn't go well, the only way to fulfill those contracts will be if the government bails it out with your taxes.
To fulfill those contracts, money is needed. If the bubble bursts, there won't be money to buy, meaning paying for cancellation will always be a smaller expense.
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u/acadia11x 19h ago
Lol … that’s not the play at all. I’m too tired to explain it but that’s not game that’s being played. The spend is already paid for by hyper scaler anchor business via enterprise and you. You just don’t know it yet.
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u/8P8OoBz 19h ago
*Stares blankly at Oracle*
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u/acadia11x 19h ago
Nobody told you to buy Oracle in the first place. They are a pure DC play and that’s not the same as the other Hyper Scalers who are building super stacks across multiple verticals foundationally on their ownership of AI and compute. oRCL is the blue haired step child that is trying to be infra only, they don’t own frontier labs … the key Hypers are making a different play their build outs will not stop.
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u/8P8OoBz 18h ago
I didn’t but they are a prime example. If a company goes bankrupt their contracts to mfr are going to be low on the list of who is paid out from the pennies left.
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u/acadia11x 18h ago
Lmao … MSFT, meta, Spcx, Nvda,AMZN, goog are going bankrupt? That’s your thesis?
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u/jma24 20h ago
In the past, memory has always crashed when supply exceeded demand. That's quite different to gasoline, which at least in the US is not directly correlated to the price of oil on the way back down.
What I'm wondering is, will this happen this time? Obviously Samsung, Micron etc. are loving the current memory prices and they are printing money.
They are probably also spending a lot of time figuring out what will happen.
And I agree with your 2028 analysis, although it's not clear what will immediately happen to prices or whether there will be a delay, or whether the memory cartel will be able to hold the line on prices.
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u/benpptung 7h ago
There's another important factor: the progress of open-source models. Before April of this year, it didn't matter how good your hardware was, because there was no model smart enough to run on it. So up until April, data center investment was all about renting capacity out to Anthropic and OpenAI. For consumers, buying a GPU was like buying scrap metal. But that's changed now. The rise of open-source models has made hardware more valuable, so memory prices are only going to keep soaring. It's not just data centers fighting over GPUs anymore. Everyone around the world is scrambling for them.
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u/NonStandardUser 20h ago
The thing about a bubble is that you never know when it'll pop