As sure a sign as any that the bubble is about to pop.
2027 memory capacity is reportedly sold out
481–490 of 493 posts
Re: 2027 memory capacity is reportedly sold out
#482Earlier quoted context omitted.
When demand exceeds supply you have two options: make the people who value those goods the highest compete with each other to pay the natural market price for them, or have a lottery with price ceilings. Price ceilings create inefficiency, and they create black markets. In a lottery, the goods are misallocated to a bunch of people who aren't getting the most value out of the goods, creating economic inefficiency. A b…
Not that I'm advocating for this with RAM, but another tried and true solution for necessary goods with limited supply is rationing. This is what got everyone through WW2, for example.
Rationing works when there are alternative goods available. Spam instead of steak, in your example.
One of the most difficult shortages during WW2 was rubber, because there was no (known, at the time) comparable alternative.
With GPUs, rationing would have the same effect as a lottery -- you either get to run AI, or you don't.
Re: 2027 memory capacity is reportedly sold out
#483Earlier quoted context omitted.
When demand exceeds supply you have two options: make the people who value those goods the highest compete with each other to pay the natural market price for them, or have a lottery with price ceilings. Price ceilings create inefficiency, and they create black markets. In a lottery, the goods are misallocated to a bunch of people who aren't getting the most value out of the goods, creating economic inefficiency. A b…
This all sounds very hypothetical economic universe. In the real world, rich people do buy expensive things and do nothing with them.
Yes it's well known that luxury goods do not fit this model. GPUs are capital goods. It isn't hypothetical when you understand the difference in the demand curves for different types of goods.
Re: 2027 memory capacity is reportedly sold out
#484Earlier quoted context omitted.
> The alternative is to have shortages. This is a myth. The volume of inventory remains the same regardless of the price. When demand is higher than supply you have shortages regardless of price simply because you have unmet demand. If you raise prices, that demand is still unmet, you're now filtering that demand by who is willing to pay more so you maximize your own value and profit. Not even rationing prevents shor…
This ignores that whenever the margins for an industry increase, this interests new investments in it, and new players to come aboard, as well as new product lines that can satisfy the demand in a new way that people either didn't consider or rejected before due to being outclassed by the formerly cheaper alternative. Rationing does not stimulate investment this way.
I never said rationing does anything else except spread around inventory to many customers.
Re: 2027 memory capacity is reportedly sold out
#485Earlier quoted context omitted.
You are basically describing predatory pricing or dumping, where the goal is not to be the best but to starve your competitors to build a monopoly and gouge customers later. Uber tried that and failed. Now they cost as much as normal taxis if not more. Airbnb tried that and now cost as much as hotels if not more. And tesla is a trillion dollar company on paper only. It can vanish into thin air in a day.
>You are basically describing predatory pricing I'm describing business . Period. It's incredibly rare to encounter products above a fairly small revenue level (niche products), that haven't come from a company that spent significant time reinvesting profits and therefore being unprofitable. Same for using outside investment. Yes, there are companies who have burned outside investment on things that didn't pan out. L…
Reinvesting doesn’t impact profits they are making. That’s not how it works
Re: 2027 memory capacity is reportedly sold out
#486Earlier quoted context omitted.
>As the memory industry is still recovering from the challenging environment in 2023, this tight supply environment will help drive the considerable improvements in profitability and ROI (return on investment) that are needed to enable the investments required to support future growth. The problem is that they need actual chips tomorrow. I fear we are reaching the point in the semiconductor industry where, in order t…
Do they really need them tomorrow? Or everyone is locking in supply to ensure that they have the chips if the data center actually gets built in the next few years?
This is a great question. Data center demand != AI demand. And chips sales at this point is driven by data center projects, not directly by AI demand.
Re: 2027 memory capacity is reportedly sold out
#487Earlier quoted context omitted.
The problem isn't the price. No matter how much you pay, you can't take delivery of a chip that doesn't exist. Now, you could raise prices to the point where you destroy demand. But that's a tricky window to maneuver through.
>> Now, you could raise prices to the point where you destroy demand Isn't that topic .. the first chapter of any economics 101 course? Supply and demand and how they influence each other? You think after hundreds of years of economic study we don't have any sort of grasp on these absolute most basic concepts?
>You think after hundreds of years of economic study we don't have any sort of grasp on these absolute most basic concepts?
Nonetheless, even after all these hundreds of years of economic study, companies still make mistakes (and occasionally, commit fraud). And we still have massive economic crashes. If only everyone understood the "basic concepts", all of this would go away and we would achieve 100% economic efficiency at all times. What a pity.
Re: 2027 memory capacity is reportedly sold out
#488Earlier quoted context omitted.
> they're going to have to start selling future chips that cannot possibly be physically produced. …but that would be unethical. cue the laugh track
Contracting for more chips than you can make isn't a fun situation to find yourself in, nobody is doing it for profit (it's actually quite expensive in time, money, and reputation to litigate the fallout). It happens due to failed estimates (we thought we could start production in January but we couldn't figure out the process until March), upstream supply failures (our surface-mount supplier can't get us enough capa…
>Contracting for more chips than you can make isn't a fun situation to find yourself in, nobody is doing it for profit (it's actually quite expensive in time, money, and reputation to litigate the fallout).
This is true in the ordinary course of business. But we may be in an extraordinary situation where, if the chipmakers do not overcommit, their stock price collapses today. Given the choice between blowing up now or blowing up 2 years from now, these companies may very well be choosing to blow up in the future. A lot could happen in the meantime, including bankruptcy of their customers. Which would certainly solve their overcommitment problem.
Re: 2027 memory capacity is reportedly sold out
#489Earlier quoted context omitted.
How does the steam machine compare to building your own?
It has a lot of benefits that aren't easily priced in.
So does a PC.
Steam Machine can't be upgraded.
Once SM becomes too slow for gaming it will become mostly useless as it lacks necessary ports to be repurposed into a reasonable home server. I always reuse my old PC parts as home server upgrades.
Steam Machine uses a proprietary fan that will be annoying or even impossible to replace 5 years from now.
Re: 2027 memory capacity is reportedly sold out
#490Earlier quoted context omitted.
Building your own is cheaper, although not by a ton. Valve isn't taking a loss on them.
Yeah, just barely, and only if you don't value warranty or build time. I'm also not super sure you could get something together that is somewhat compact like the steam machine and still be cheaper. I've built two PCs in the last 5 years and both have had parts that were broken from the factory... There is something to be said about being able to hand off troubleshooting and replacement. I had ASRock pointing fingers…
I build and/or service all of my PCs, servers and laptops. I never had a single component die on me. I still have my first 128GB Samsung SSD serving as a boot drive in my NAS. Sometimes I buy used parts. Sometimes I sell used parts. I never had any problems with DOA parts no matter if new or used. I'm always careful with static electricity (no sweaters, carpets, cats etc near components). Maybe I'm just lucky or maybe some people are not careful enough with sensitive electronics.