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points

by tdhz771 days ago |

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by IsTom1 days ago|

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If it goes on long enough new manufacturers will eventually spin up and sell RAM cheaper.

by ChadNauseam1 days ago|

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Can you point to an example of this happening in the past? Where a supply shortage leads to price increases and "record profits", and the price never goes back down?

by girvo22 hours ago|

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GPUs?

Though that’s kind of cheating considering it’s basically a monopoly at this point

by rtkwe23 hours ago|

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There's a lot of money behind AI to try to make fetch happen but every attempt to capture the real cost of running these models has driven home to people that we're still deep in the "burn money to acquire customers" phase before the "start charging people gobs of money to make a profit" turn. All the stories of companies burning through their whole year of AI budget in the recent move from subscription to usage based billing is a big example.

If that bubble pops like it seems to be threatening to do memory prices could drop back to their old levels give or take some sticky inflation.

by drstewart1 days ago|

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>Monopolies or better put the mergers of companies over the last 40 years hasn’t lead to cheaper prices,

Can you explain this chart?

https://ourworldindata.org/grapher/historical-cost-of-comput...

by tdhz7723 hours ago|

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Good point. But only a few companies create these things. They can jack up the price and there is nothing we can do. Is there a mom and pop shop making memory yet? Nope, centralized power of commerce is a threat.

by nl16 hours ago|

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I think the point is that "only a few companies create these things" has always been true.

You need to provide a compelling argument why it is different this time.

The counter-argument is pretty basic:

RAM companies are currently selling as much as they can at high prices. This leads to investment in building new factories.

At some point the supply of new RAM will match the demand for it. When that occurs companies can increase profit by cutting prices to gain market share.

What's more, all the RAM companies have slightly different estimates of what the demand is. This leads to different levels of investment in new factories. Some will over-invest in new factories and the only way they can make their investment back is by increasing market share.

The final factor is new entries in the market. Chinese RAM manufactures can already produce DDR4 RAM (but only small amounts of DDR5). They can both increase supply of DDR4 RAM and are aggressively chasing DDR5 capabilities.

TL;DR: The profit motive is too strong for companies to artificially keep prices high once demand drops.

by OtomotO8 hours ago|

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But why would they invest in more factories if they also think it's a temporary hickup?

Then it's just the same capacity, but without huge buyers. Still the prices won't come down...

If they built new factories now, they would just lose money to an investment that would not pay off.

(Of course under the premise that AI collapses or is saturated at some point. If that doesn't hold true then ex falso quodlibet!)

by nl7 hours ago|

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> But why would they invest in more factories if they also think it's a temporary hickup?

Because they have orderbooks 2 years (at least) into the future so know what demand is there - and they are demanding deposits for future orders.

It's easy to see if this is true. Look for news on new factories opening:

Micron: https://finance.yahoo.com/technology/ai/articles/micron-mu-p...

Samsung: https://www.kedglobal.com/korean-chipmakers/newsView/ked2026... (note this is doubling Samsung's memory production)

SK Hynix: https://finance.yahoo.com/sectors/technology/articles/sk-hyn...

by OtomotO6 hours ago|

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Yes, 2 years.

How long does building a factory take?

If the demand grows with their production they can sell more units at the same price.

If demand goes down by a certain percentage, they sell more for less + they lost the investment into new factories.

It all is based on IFs and about personality, about "optimism" vs "pessimism"

I for one think that the AI bubble will "burst" at some point and I think that then there will be a lot of hardware to go by.

Time will be the judge of my abilities to replace the Oracle of Delphi.