Our problem is lack of competition
High prices for RAM should attract competition.
Chinese DRAM production is already getting ready to ramp up.
https://www.tomshardware.com/pc-components/ram/hp-reportedly...
How can Apple deal with the memory shortage?
11–20 of 202 posts
Re: How can Apple deal with the memory shortage?
#12Earlier quoted context omitted.
In general, no. It takes billions to tens of billions to setup a fab. It also takes years to get it working. Then when you add in the IP for memory, it pretty much ain't happening. All the RAM monopoly has to do is wait 3 days before you're producing and drop the price and you're ruined. Meanwhile they've built up a battle chest of hundreds of billions in profits. China might be the only competition we see come out o…
There are a lot of companies that have billions in cash and are also prodigious buyers of RAM. Companies like Apple, Google, Meta, Nvidia... Do they want to get into a commodity business like RAM production? Maybe not, but if prices stay high long enough that demand for their products falls off, they might think about it. I know that I personally and my employer are cutting way back on new technology purchases and sq…
And none of these companies are operating their own fabs, that's the problem.
Fabs are a cutthroat business that's very hard to get into. It costs billions of continual investment to stay a float. That's why there's really only about 3 different companies with cutting edge fabs. TSMC, Micron, and Samsung. Even intel, who built a huge portion of their business on cutting edge fab tech, has struggled to keep funding it. AMD got out of the fab business almost a decade ago (spinning off global foundries) and that spin off is no longer cutting edge. AMD uses TSMC.
Fabs are some of the most expensive factories to operate on this planet due to a constant need for brand new equipment and cutting edge research. That's why there's not an Apple, Google, Meta, or Nvidia fab. That's why there's not an AMD fab. That's why Intel fabs are treading water.
Without the constant investment, you very quickly find yourself in the company of yet another cutthroat industry, the "not cutting edge" fabrication industry. And that, by and large, has already been locked up by about a dozen fab companies.
Re: How can Apple deal with the memory shortage?
#13This reads like Apple fanfiction to me. > But then Apple can negotiate on another basis and say, well, if you don’t do us a favor here and give us a better rate, then maybe we won’t work with you when all this settles down. You know things are going to settle down. These things are always cyclical. There’s never been a semiconductor boom that’s not followed by a semiconductor bust. Never. And they know it. I have to…
Apple bought PA Semi as the starting point to getting off of Intel. Theoretically, memory seems like something Apple could figure out how to fab. And it's not like they don't have any capital reserves.
They bought P.A. Semi, but it was for their design capability; they never had fabs anyway, and Apple still depends on TSMC and others for manufacturing chips. Apple building fabs to ensure a guaranteed supply of memory (or logic) chips would be an unprecedented level of vertical integration, even for them.
Re: How can Apple deal with the memory shortage?
#14This reads like Apple fanfiction to me. > But then Apple can negotiate on another basis and say, well, if you don’t do us a favor here and give us a better rate, then maybe we won’t work with you when all this settles down. You know things are going to settle down. These things are always cyclical. There’s never been a semiconductor boom that’s not followed by a semiconductor bust. Never. And they know it. I have to…
Apple bought PA Semi as the starting point to getting off of Intel. Theoretically, memory seems like something Apple could figure out how to fab. And it's not like they don't have any capital reserves.
In the Tim Cook era when Apple needs to lock down the supply of a commodity part, they have a history of buying a dedicated manufacturing line for a manufacturing partner.
Re: How can Apple deal with the memory shortage?
#15[dead]
Re: How can Apple deal with the memory shortage?
#16Earlier quoted context omitted.
In general, no. It takes billions to tens of billions to setup a fab. It also takes years to get it working. Then when you add in the IP for memory, it pretty much ain't happening. All the RAM monopoly has to do is wait 3 days before you're producing and drop the price and you're ruined. Meanwhile they've built up a battle chest of hundreds of billions in profits. China might be the only competition we see come out o…
There are a lot of companies that have billions in cash and are also prodigious buyers of RAM. Companies like Apple, Google, Meta, Nvidia... Do they want to get into a commodity business like RAM production? Maybe not, but if prices stay high long enough that demand for their products falls off, they might think about it. I know that I personally and my employer are cutting way back on new technology purchases and sq…
>a lot of companies that have billions in cash
They sit on billions because they avoid spending their money as much as possible.
The amount they spend on RAM in surrounding few years would represent almost nothing to the massive money hole that would happen if they tried to make their own fab.
Also, these problems tend to affect the entire market, which means if you're big, you're fine. It's when problems don't affect your competitors but affect you that the real issues for these companies crop up.
Re: How can Apple deal with the memory shortage?
#17Earlier quoted context omitted.
There are a lot of companies that have billions in cash and are also prodigious buyers of RAM. Companies like Apple, Google, Meta, Nvidia... Do they want to get into a commodity business like RAM production? Maybe not, but if prices stay high long enough that demand for their products falls off, they might think about it. I know that I personally and my employer are cutting way back on new technology purchases and sq…
And none of these companies are operating their own fabs, that's the problem. Fabs are a cutthroat business that's very hard to get into. It costs billions of continual investment to stay a float. That's why there's really only about 3 different companies with cutting edge fabs. TSMC, Micron, and Samsung. Even intel, who built a huge portion of their business on cutting edge fab tech, has struggled to keep funding it…
And a 64G DDR5 ECC DIMM costs $3K and is backordered. If ths isn't a bubble and demand persists, some new players are eventually going to want a cut of that.
Re: How can Apple deal with the memory shortage?
#18Earlier quoted context omitted.
And none of these companies are operating their own fabs, that's the problem. Fabs are a cutthroat business that's very hard to get into. It costs billions of continual investment to stay a float. That's why there's really only about 3 different companies with cutting edge fabs. TSMC, Micron, and Samsung. Even intel, who built a huge portion of their business on cutting edge fab tech, has struggled to keep funding it…
And a 64G DDR5 ECC DIMM costs $3K and is backordered. If ths isn't a bubble and demand persists, some new players are eventually going to want a cut of that.
We aren't talking about making new lug-nuts. A company can't just will a fab into existence.
For example, Micron is actively building a few new fabs. One of which has been in progress since Biden (pretty close to my home in fact). It's not going to be completed for another 5 years at a minimum. And this is a company that has the experience and partnerships for producing fabs.
Yes, a new company might decide they want to enter the market, but even if they decided, today, "Yes we'll do this" I'd expect a minimum of a decade before they start spinning out their first chips. That's also at least a $1T investment at this point to get started.
Re: How can Apple deal with the memory shortage?
#19Earlier quoted context omitted.
And none of these companies are operating their own fabs, that's the problem. Fabs are a cutthroat business that's very hard to get into. It costs billions of continual investment to stay a float. That's why there's really only about 3 different companies with cutting edge fabs. TSMC, Micron, and Samsung. Even intel, who built a huge portion of their business on cutting edge fab tech, has struggled to keep funding it…
And a 64G DDR5 ECC DIMM costs $3K and is backordered. If ths isn't a bubble and demand persists, some new players are eventually going to want a cut of that.
The thing is, pretty much everyone relevant assumes it is a bubble and that eventually large players will end up facing mob justice. That's why the hundreds of billions of $ IOUs are getting passed around like hot potatoes, and that's (in addition to ASML, the key part of anything EUV lithography, being booked out for years) why no one is planning to construct dozens of billions of dollars worth of fabs.
In addition, the know-how is concentrated in Taiwan. You literally can't train enough people in enough time to move everything out of there.
Re: How can Apple deal with the memory shortage?
#20Earlier quoted context omitted.
And none of these companies are operating their own fabs, that's the problem. Fabs are a cutthroat business that's very hard to get into. It costs billions of continual investment to stay a float. That's why there's really only about 3 different companies with cutting edge fabs. TSMC, Micron, and Samsung. Even intel, who built a huge portion of their business on cutting edge fab tech, has struggled to keep funding it…
And a 64G DDR5 ECC DIMM costs $3K and is backordered. If ths isn't a bubble and demand persists, some new players are eventually going to want a cut of that.
So yea, Samsung built a chip factory pretty close to where I live. Number one it is forking gigantic. You don't just slap one of these babies down. Next, the equipment that goes inside of that massive clean room building is a problem in itself. That takes years to get ordered, then years to ensure it works right, with employees that have a very particular skill set.
Again, people might want part of it, but they are also a bit smarter than you are and read history books to see exactly how this is going to play out and then they gladly walk away before they light their money on fire.