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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

#231

Post by Imustaskforhelp »

motbus3 wrote: post #226

For me, there is concerning a flag about all of this. I know this is not always true, but on this case, crucial folks say the margins for end user are too low and they have demand for AI. I suppose they do not intend to bring a new AI focused unit because it is not worth it or they believe the hype might be gone before it they are done. But what intrigues me is why they would allow other competitors to step up in a s…

So my understanding of the situation is that, Crucial folks had downsized their factory production (see my other comments for reference perhaps) but then AI involvement started demanding chips just at the time their factory production was at their lows.

So now for these AI companies, they got tons of money to burn so they are willing to pay a lot more, so now crucial only have a limited supply of ram and the thing is there isn't much difference between AI chip and consumer chip but the margins of AI chip are super higher compared to consumer chip

So earlier they would sell consumer chips and AI chips as well but then the AI companies still demanded even more and they would get insane profits selling them so what they did (atleast crucial) is that they stopped selling consumer chips just to sell AI chips for profit.

> I suppose they do not intend to bring a new AI focused unit because it is not worth it or they believe the hype might be gone before it they are done. But what intrigues me is why they would allow other competitors to step up in a segment they dominate? They could raise the prices for the consumers if they are not worried about competition...

Well as a consumer, I certainly hope so but I think that these companies did this case because their have been times they were -55% in stock prices and its just cash making money device at this point and there is a monopoly of fabs with just three key players.

So the answer to your question is "money" and "more money" short term. Their stock prices are already up I think and a company really loves short term rising stock prices

> They could raise the prices for the consumers if they are not worried about competition

Well, would you increase the prices 3-4x? Because supposedly thats how much the AI chips from what I've heard are... And due to this, the second hand market itself is selling these at a close-enough mark.

I don't know but I hope that new players come in the market, I didn't know that this ram industry was such monopolistic with there being only 3 key players and how that became a chokehold for the whole world economy in a way

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

#232

Post by Imustaskforhelp »

goku12 wrote: post #200
synack wrote: post #194

Earlier quoted context omitted.

Industrial microcontrollers and power electronics use older process nodes, mostly >=45nm. These customers aren’t competing for wafers from the same fabs as bleeding edge memory and TPUs. The world ran just fine on DDR3 for a long time.

Okay, but what about the rest? The ones that aren't embedded in someway and use industrial grade PCs/control stations? Or ones with large buffers like network routers? I'm also wondering about the supply of the alternate nodes and older technologies. Will the manufactures keep those lines running? Was it micron that abandoned the entire retail market in favor of supplying the hyperscalers?

> The ones that aren't embedded in someway and use industrial grade PCs/control stations? Or ones with large buffers like network routers?

Not sure if they require DDR5 but the AI crisis just caused the prices of DDR5 to rise but the market supply of DDR4 thus grew and that's why they got more expensive too

> I'm also wondering about the supply of the alternate nodes and older technologies.

I suppose these might be chinese companies but there might be some european/american companies (not sure) but if things continue, there is gonna be a strain on them in demand and they might increase their prices too

> Was it micron that abandoned the entire retail market in favor of supplying the hyperscalers?

Yes

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

#233

Post by dartharva »

torginus wrote: post #152
palmotea wrote: post #139

Earlier quoted context omitted.

> It's somewhat alarming to see that companies (owned by a very small slice of society) ... can easily price the rest of humanity out of computing goods. If AI lives up to the hype, it's a portent of how things will feel to the common man. Not only will unemployment be a problem, but prices of any resources desired by the AI companies or their founders will rise to unaffordability.

I think living up to the hype needs to be defined. A lot of AI 'influencers' love wild speculation, but lets ignore the most fantastical claims of techno-singularity, and let's focus on what I would consider a very optimistic scenario for AI companies - that AI capable of replacing knowledge workers can be developed using the current batch of hardware, in the span of a year or two. Even in this scenario, the capital…

> Even in this scenario, the capital gains on the lump sump invested in AI far outpaces the money that would be spent on the salaries of these workers, and if we look at the scenario with investor goggles, due to the exponential nature of investment gains, the gap will only grow wider.

Interesting hypothesis, do you have the math to back it up?

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

#234

Post by Imustaskforhelp »

goku12 wrote: post #203
lysace wrote: post #193

Earlier quoted context omitted.

A $100k EV has roughly the same amount of DRAM as a $1k phone. The EV is a therefore, on a whole, a lot less sensitive to DRAM price increases.

Okay, accepted. But are you sure that the supply won't be a problem as well? I mean, even if these products choose a different process nodes compared to the hyperscalers, will the DRAM manufactures even keep those nodes running in favor of these industries?

What will probably happen is that the reselling market/2nd market of these might probably rise

> will the DRAM manufactures even keep those nodes running in favor of these industries?

Some will, Some might not, In my opinion, the longevity of these brands will only depend if they allow buying ram for the average person/consumer brands so I guess we might see new competition perhaps or give more marketshare to all the other fab companies beyond the main three of these industries.

I am sure that some company will 100% align with the consumers but the problem to me feels that they wouldn't be able to supply enough production to consumers in the first place so prices still might rise.

And those prices most likely will be paid by you in one form or another but it would be interesting to see how long the companies who buy dram from these providers or build datacenters or anything ram intensive will hold their price up, perhaps they might eat the loss short term similar to what we saw some companies do during trump tarrifs.

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

#236

Post by sph »

jstanley wrote: post #155
torginus wrote: post #133

It's somewhat alarming to see that companies (owned by a very small slice of society) producing these AI thingies (whose current economic is questionable value and actual future potential is up to hot debate), can easily price the rest of humanity out of computing goods.

You don't think that as prices go up, the supply might also go up, and the equilibrium price will be maintained? And possibly even a lower equilibrium will be reached due to greater economies of scale.

> You don't think that as prices go up, the supply might also go up, and the equilibrium price will be maintained?

This assumes infinite and uniformly distributed resources as well as no artificial factors such as lobbying, corruption, taxation or legislation which might favour one entity over the other.

The dream of free market exists only in a vacuum free from the constraints of reality.

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

#237

Post by sph »

01HNNWZ0MV43FF wrote: post #143
torginus wrote: post #133

It's somewhat alarming to see that companies (owned by a very small slice of society) producing these AI thingies (whose current economic is questionable value and actual future potential is up to hot debate), can easily price the rest of humanity out of computing goods.

Without regulation, money begets money and monopolies will form. If the American voter base doesn't pull its shit together and revive democracy, we're going to have a bad century. Yesterday I met a man who doesn't vote and I wanted to go ape-shit on him. "My vote doesn't matter". Vote for mayor. Vote for city council. Vote for our House members. Vote for State Senate. Vote for our two Senators. "Voting doesn't matter…

> Without regulation, money begets money and monopolies will form.

Ahem, you'll find that with regulation, money begets money and monopolies will form. That is, unless you magically produce legislators which are incorruptible, have perfect knowledge and always make the perfect choice.

Even the Big Bang was imperfect, and matter clumps together instead of being perfectly distributed in the available space.

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

#238

Post by newsclues »

torginus wrote: post #133

It's somewhat alarming to see that companies (owned by a very small slice of society) producing these AI thingies (whose current economic is questionable value and actual future potential is up to hot debate), can easily price the rest of humanity out of computing goods.

First crypto now AI.

I just want to play video games so I don’t have to interact with people

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

#239

Post by Imustaskforhelp »

elthor89 wrote: post #146

If all manufacturers jump into serving the ai market segment. Can this not be a opportunity for new entrants to start serving the other market segments? How hard is it to start and manufacture memory for embedded systems in cars, or pc?

One might think so but the AI companies actually lose a lot and I mean a lot of money in these deals.

Even if they might sell their inference and everything, they still wouldn't be that much profitable.

So like, the key point is that a ram company can supply openAI ram and get some really high quick bucks which would be even more than if they were to create thier own datacenters,run open source models in them, provide inference in say open router.

Now you might ask: Is openAI or these AI companies mad for burning so much money?

And I think you might know the answer to that.

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

#240

Post by Imustaskforhelp »

SunlitCat wrote: post #210
nice_byte wrote: post #162

Earlier quoted context omitted.

No, because if you have the capacity to make e.g. ram chips it makes more economic sense to sell them for ai bucks. Serving the other market segment is an opportunity cost unless you're selling to them at same prices. In the long run though if enough players emerge the price will eventually come down just due to oversupply.

Not quite. Making specialized DRAM chips for AI hardware needs, requires high tech components. Making low(er) end DRAM chips for consumer needs might be easier to get started with. I am pretty sure, in the next year we will see a wave of low end ram components coming out of china.

Yea I think the same too. China is notorious for price dumping but this might be good for the end consumer.
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