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As AI gobbles up chips, prices for devices may rise

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Re: As AI gobbles up chips, prices for devices may rise

#31

Post by nrp »

jazzyjackson wrote: post #12

Question: are SoCs with on die memory be effected by this? Looks like the frame.work desktop with Ryzen 128GB is shipping now at same price it was on release, Apple is offering 512GB Mac studios Are snapdragon chips the same way?

We’ve been able to hold the same price we had at launch because we had buffered enough component inventory before prices reached their latest highs. We will need to increase pricing to cover supplier cost increases though, as we recently did on DDR5 modules.

Note that the memory is on the board for Ryzen AI Max, not on the package (as it is for Intel’s Lunar Lake and Apple’s M-series processors) or on die (which would be SRAM). As noted in another comment, whether the memory is on the board, on a module, or on the processor package, they are all still coming from the same extremely constrained three memory die suppliers, so costs are going up for all of them.

Re: As AI gobbles up chips, prices for devices may rise

#32

Post by DamnInteresting »

shevy-java wrote: post #19

I now consider this a mafia that aims to milk us for more money. This includes all AI companies but also manufacturers who happily benefit from this. It is a de-facto monopoly. Governments need to stop allowing this milking scheme to happen.

When it's more than one company working together in a monopoly-like fashion, the term is "oligopoly".

https://www.merriam-webster.com/dictionary/oligopoly

Re: As AI gobbles up chips, prices for devices may rise

#34

Post by yowlingcat »

shevy-java wrote: post #19

I now consider this a mafia that aims to milk us for more money. This includes all AI companies but also manufacturers who happily benefit from this. It is a de-facto monopoly. Governments need to stop allowing this milking scheme to happen.

Technically it's a lot closer to monopsony (Sam Altman/OAI cornering 40% of the market on DRAM in a clever way for his interests that harms the rest of the world that would want to use it). I keep hoping that somehow necessity will spur China to become the mother of invention here and supply product to serve the now lopsided constrained supply given increasing demand but I just don't know how practical it will be.

Re: As AI gobbles up chips, prices for devices may rise

#35

Post by trollbridge »

piskov wrote: post #14
jazzyjackson wrote: post #12

Question: are SoCs with on die memory be effected by this? Looks like the frame.work desktop with Ryzen 128GB is shipping now at same price it was on release, Apple is offering 512GB Mac studios Are snapdragon chips the same way?

Apple secured at least a year-worth supply of memory (not in actual chips but in prices). The bigger the company = longer the contract. However it will eventually catch up even to Apple. It is not prices alone due to demand but the manufacturing redirection from something like lpddr in iphones to hbm and what have you for servers and gpu

I have a feeling every single supplier of DRAM is going to be far more interested in long-term contracts with Apple than with (for example) OpenAI, since there's basically zero possibility Apple goes kaput and reneges on their contracts to buy RAM.

Re: As AI gobbles up chips, prices for devices may rise

#36

Post by [deleted] »

throwaway94275 wrote: post #28
shevy-java wrote: post #19

I now consider this a mafia that aims to milk us for more money. This includes all AI companies but also manufacturers who happily benefit from this. It is a de-facto monopoly. Governments need to stop allowing this milking scheme to happen.

"Monopoly" means one seller, so you can't say multiple X makes a monopoly and make sense. You probably mean collusion. If demand exceeds supply, either prices rise or supply falls, causing shortages. Directly controlling sellers (prices) or buyers (rationing) results in black markets unless enforcement has enough strength and integrity. The required strength and integrity seems to scale exponentially with the value o…

[deleted]

Re: As AI gobbles up chips, prices for devices may rise

#37

Post by linguae »

yooogurt wrote: post #13
netbioserror wrote: post #4

Positive downstream effect: The way software is built will need to be rethought and improved to utilize efficiencies for stagnating hardware compute. Think of how staggering the step from the start of a console generation to the end used to be. Native-compiled languages have made bounding leaps that might be worth pursuing again.

Alternatively, we'll see a drop in deployment diversity, with more and more functionality shifted to centralised providers that have economies of scale and the resources to optimise. E.g. IDEs could continue to demand lots of CPU/RAM, and cloud providers are able to deliver that cheaper than a mostly idle desktop. If that happens, more and more of its functionality will come to rely on having low datacenter latencies…

I’d feel better about the RAM price spikes if they were caused by a natural disaster and not by Sam Altman buying up 40% of the raw wafer supply, other Big Tech companies buying up RAM, and the RAM oligopoly situation restricting supply.

This will only serve to increase the power of big players who can afford higher component prices (and who, thanks to their oligopoly status, can effectively set the market price for everyone else), while individuals and smaller institutions are forced to either spend more or work with less computing resources.

The optimistic take is that this will force software vendors into shipping more efficient software, but I also agree with this pessimistic take, that companies that can afford inflated prices will take advantage of the situation to pull ahead of competitors who can’t afford tech at inflated prices.

I don’t know what we can do as normal people other than making do with the hardware we have and boycotting Big Tech, though I don’t know how effective the latter is.

Re: As AI gobbles up chips, prices for devices may rise

#38

Post by vee-kay »

For last 2 years, I've noticed a worrying trend: the typical budget PCs (especially Laptops) are being sold at higher prices with lower RAM (just 8GB) and lower-end CPUs (and no dedicated GPUs).

Industry mandate should have become 16GB RAM for PCs and 8GB for mobile, since years ago, but instead it is as if computing/IT industry is regressing.

New budget mobiles are being launched with lower-end specs as well (e.g., new phones with Snapdragon Gen 6, UFS2.2). Meanwhile, features that were being offered in budget phones, e.g., wireless charging, NFC, UFS3.1 have silently been moved to the premium mobile segment.

Meanwhile the OSes and software are becoming more and more complex, bloated and more unstable (bugs) and insecure (security loopholes ready for exploits).

It is as if the industry has decided to focus on AI and nothing else.

And this will be a huge setback for humanity, especially the students and scientific communities.

Re: As AI gobbles up chips, prices for devices may rise

#39

Post by saagarjha »

trollbridge wrote: post #35
piskov wrote: post #14

Earlier quoted context omitted.

Apple secured at least a year-worth supply of memory (not in actual chips but in prices). The bigger the company = longer the contract. However it will eventually catch up even to Apple. It is not prices alone due to demand but the manufacturing redirection from something like lpddr in iphones to hbm and what have you for servers and gpu

I have a feeling every single supplier of DRAM is going to be far more interested in long-term contracts with Apple than with (for example) OpenAI, since there's basically zero possibility Apple goes kaput and reneges on their contracts to buy RAM.

Yes, but OpenAI wants $200 billion in RAM and Apple wants $10.

Re: As AI gobbles up chips, prices for devices may rise

#40

Post by vee-kay »

DamnInteresting wrote: post #32
shevy-java wrote: post #19

I now consider this a mafia that aims to milk us for more money. This includes all AI companies but also manufacturers who happily benefit from this. It is a de-facto monopoly. Governments need to stop allowing this milking scheme to happen.

When it's more than one company working together in a monopoly-like fashion, the term is "oligopoly". https://www.merriam-webster.com/dictionary/oligopoly

There is another word for it: cartel.

e.g., the Phoebus cartel https://en.wikipedia.org/wiki/Phoebus_cartel

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