GF Securities: Taking Actions to Manage Memory Cost
Management of AI Memory Costs & Spec Cuts> Nvidia VR200 NVL72 Adjustments: Nvidia is cutting the default SOCAMM configuration in VR200 NVL72 racks by half (shipping 96GB SOCAMM modules instead of 192GB) to address LPDDR5X supply constraints and cost optimization. > Impact on Memory Volume: CPU-side LPDDR5X memory per rack drops from ~54–55TB down to ~28TB, while GPU-side HBM4 capacity remains unchanged at ~20.7TB per rack. > Vera CPU Rack Outlook: Nvidia's Vera CPU racks are also expected to adopt 96GB SOCAMM per CPU (768GB total per CPU instead of the 1.5TB spec sheet), though deliveries may be delayed due to stacking and density changes with Samsung as the sole supplier. > General Servers Lowering Specs: General server DDR5 specs are expected to be reduced by roughly 50% per CPU, with 96GB/64GB becoming the new mainstream via new RDIMM and/or MRDIMM. Financial & BOM Impact> VR200 Cost Reduction: Reducing LPDDR5X capacity effectively lowers LPDDR5X costs to $293k (under an extreme scenario down to one-fourth capacity) or $586k (4Q26E version), preventing costs from escalating to $1.2m. > Controlling Total BOM: Without capacity adjustments, memory and storage costs would spike to $2.1m (29% of the total BOM); cutting capacity successfully manages memory costs back down to the ~20% level. Market Shipments & Outlook> Deployment Priority: The specification cuts allow Nvidia to prioritize faster system deployment and higher rack availability rather than delaying deliveries. > General Server Recovery: General server shipments are projected to rise mildly QoQ in 2Q–3Q26, followed by a strong pick-up of 20% to 30% QoQ in 4Q26. $NVIDIA(NVDA.US) $Micron Tech(MU.US) $DRAM $EWY
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