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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

#111

Post by charcircuit »

rurp wrote: post #66
deadbabe wrote: post #60

Earlier quoted context omitted.

I think it will be a good thing actually. Engineers, no longer having the luxury of assuming that users have high end system specs, will be forced to actually write fast and efficient software. No more bloated programs eating up RAM for no reason.

The problem is that higher performing devices will still exist. Those engineers will probably keep using performant devices and their managers will certainly keep buying them. We'll probably end up in an even more bifurcated world where the well off have access to lot of great products and services that most of humanity is increasingly unable to access.

If "performant" devices are not widespread then telemetry will reveal that the app is performing poorly for most users. If a new festure uses more memory and sugnificantly increases the crash rate, it will be disabled.

Apps are optimized for the install base, not for the engineer's own hardware.

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

#112

Post by ozgrakkurt »

yooogurt wrote: post #25
shevy-java wrote: post #21

Earlier quoted context omitted.

I don't think any of this is "fascinating" - it is more of a racket scheme. They push the prices up. Governments failed the people here.

Isn't this more easily explained by supply-demand? Supply can't quickly scale, and so with increased demand there will be increased prices.

Imagine someone goes to the supermarket and buys all the tomatoes. Then supermarket owner says I don’t know, he bought all at once so it is a better sale. And he sells the remaining 10% of tomatoes at a huge markup

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

#113

Post by czhu12 »

It seems… fine? Hasn’t DRAM always been a boom and bust industry with no real inflation — in fact massive deflation — over the past 30 years?

Presumably the boom times are the main reason why investment goes into it so that years later, consumers can buy for cheap.

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

#114

Post by chii »

vee-kay wrote: post #38

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.,…

> Industry mandate should have become 16GB RAM for PCs

it was only less than 10 yrs ago that a high end PC would have this level of ram. I think the last decade of cheap ram and increasing core count (and hz) have spoiled a lot of people.

We are just returning back on trend. May be software would be written better now that you cannot expect the average low budget PC to have 32G of ram and 8 cores.

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

#115

Post by appellations »

mips_avatar wrote: post #95
nrp wrote: post #31

Earlier quoted context omitted.

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 woul…

How do suppliers communicate these changes? Are they just like yep now it’s 3x higher? Im surprised you don’t have longer contracts

Longer contracts are riskier. The benefit of having cheaper RAM when prices spike is not strong enough to outweigh the downside of paying too much for RAM when prices drop or stay the same. If you’re paying a perpetual premium on the spot price to hedge, then your competitors will have pricing power over you and will slowly drive you out of the market. The payoff when the market turns in your favor just won’t be big enough and you might not survive as a business long enough to see it. There’s also counterparty risk, if you hit a big enough jackpot your upside is capped by what would make the supplier insolvent.

All your competitors are in the same boat, so consumers won’t have options. It’s much better to minimize the risk of blowing up by sticking as closely to spot at possible. That’s the whole idea of lean. Consumers and governments were mad about supply chains during the pandemic, but companies survived because they were lean.

In a sense this is the opposite risk profile of futures contracts in trading/portfolio management, even though they share some superficial similarities. Manufacturing businesses are fundamentally different from trading.

They certainly have contracts in place that cover goods already sold. They do a ton of preorders which is great since they get paid before they have to pay their suppliers. Just like airlines trade energy futures because they’ve sold the tickets long before they have to buy the jet fuel.

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

#116

Post by chii »

OGEnthusiast wrote: post #100
callc wrote: post #58

Earlier quoted context omitted.

Mint is probably around 0.05% of desktop/laptop users. I think root comment is looking at the overall picture of what all customers can get for their money, and see it getting worse. This wasn’t mentioned, but it’s a new thing for everyone to experience, since the general trend of computer hardware is it gets cheaper and more powerful over time. Maybe not exponentially any more, but at least linearly cheaper and more…

> I think root comment is looking at the overall picture of what all customers can get for their money, and see it getting worse. A $999 MacBook Air today is vastly better than the same $999 MacBook Air 5 years ago (and even more so once you count inflation).

The OP is not looking at the static point (of the price of that item), but the trend - ala, the derivative of the price vs quality. It was on a steep upward incline, and now it's flattening.

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

#117

Post by chii »

Insanity wrote: post #62
deadbabe wrote: post #60

Earlier quoted context omitted.

I think it will be a good thing actually. Engineers, no longer having the luxury of assuming that users have high end system specs, will be forced to actually write fast and efficient software. No more bloated programs eating up RAM for no reason.

I'm not optimistic that this would be the outcome. You likely will just have poor running software instead. After all, a significant part of the world is already running lower powered devices on terrible connection speeds (such as many parts of Africa).

> a significant part of the world is already running lower powered devices

but you cannot consider this in isolation.

The developed markets have vastly higher spending consumers, which means companies cater to those higher spending customers proportionately more (as profits demand it). Therefore, the implication is that lower spending markets gets less investment and less catered to; after all, R&D spending is still a limiting factor.

If the entirety of the market is running on lower powered devices, then it would get catered for - because there'd be no (or not enough) customers with high powered devices to profit off.

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

#118

Post by chii »

mips_avatar wrote: post #95
nrp wrote: post #31

Earlier quoted context omitted.

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 woul…

How do suppliers communicate these changes? Are they just like yep now it’s 3x higher? Im surprised you don’t have longer contracts

> longer contracts

the risk is that such longer contracts would then lock you into a higher cost component for longer, if the price drops. Longer contracts only look good in hindsight if ram prices increased (unexpectedly).

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

#119

Post by Fabricio20 »

SXX wrote: post #80
vee-kay wrote: post #38

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.,…

No dedicated GPU is certainly unrelated to whatever been happening for last two years. It's just in last 5 years integrated GPUs become good enough even for mid-tier gaming let alone running browser and hw accel in few work apps. And even before 5 years ago majority of dedicated GPUs in relatively cheap laptops was garbage barely better than intrgrated one. Manufacturers mostly put them in there for marketing of havi…

I'm gonna be honest thats not my experience at all. I got a laptop with a modern ryzen 5 CPU four years ago that had an iGPU because "its good enough for even mid-tier gaming!" and it was so bad that I couldn't play 1440p on youtube without it skipping frames. Tried parsec to my desktop PC and it was failing that as well. I returned it and bought a laptop with a nvidia dGPU (low end still, I think it was like a 1050-refresh-refresh equivalent) and haven't had any of those problems. That AMD Vega gpu just couldn't do it.

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

#120

Post by bigbadfeline »

hn_throwaway_99 wrote: post #103
bigbadfeline wrote: post #53

Earlier quoted context omitted.

> has more demand than forecast Nah. The demand is driven by corporations that hoard hardware in datacenters, starving the market and increasing prices in the process - otherwise known as scalping . Then they sell you back that same hardware, in the form of cloud services, for even higher prices. More explanations here: https://news.ycombinator.com/item?id=46416934

Wow, this is an economics-free take if I've ever heard one. And calling it scalping feels laughable. There are multiple RAM providers. Datacenters, many competing ones, are gobbling up RAM because there is currently a huge demand. And, unlike actual ticket scalpers, datacenters perform a very valuable service beyond just reselling the RAM. After all, end users could buy up RAM and GPUs themselves and build their own…

> This is simply run-of-the-mill supply and demand.

That's definitely NOT run-of-the-mill demand because it comes from companies buying hardware at operating loss, which can only be recouped by scalping higher prices at the expense of a starved market.

Demand funded by circular financial agreements and off-the-book debt isn't "run-of-the-mill" by any stretch.

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