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DRAM prices are spiking, but I don't trust the industry's why

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Re: DRAM prices are spiking, but I don't trust the industry's why

#121

Post by protocolture »

amy_petrik wrote: post #112
ChadNauseam wrote: post #56

Earlier quoted context omitted.

> then during spikes in demand (or alleged spikes in demand) they coordinate to keep the price from dropping. Why would they need to coordinate to keep the price from dropping during a spike in demand? a spike in demand will obviously not be expected to lower prices regardless of collusion

>Why would they need to coordinate to keep the price from dropping during a spike in demand? They wouldn't you're right. But I would expect for them to follow the sorts of behavior we've observed in other markets - egg prices, gasoline prices. When a spike occurs, even if as brief as a lightning strike, they will only very slowly drop prices, when in a purely capitalistic world the price drop ought to be equally fast…

>they will only very slowly drop prices

Of course. Price drops only really come through in response to competition.

Long term high prices invite further investment. Investment arrives and wants a quick return. Fastest way to return is to sell above cost but below market. Established players respond. Yada yada. I once met a former projector salesman who was unbelievably angry that someone, I think Acer, came along and destroyed the ~2000 AUD hard price floor that projectors once commanded, which dropped the whole market and his commissions along with it.

Even when collusion is government endorsed instead of outlawed, the same rules apply. See the bromkonvention. You need the new player willing to take the 10% margin to hurt the bottom line of the guy taking 150%.

>when in a purely capitalistic world the price drop ought to be equally fast

No the price can only drop as fast as supply and competition can catch up. For an industry with high input capex costs, thats extremely slowly. I would think some banks would be keen to take a risk on a new RAM fab based on the demands coming from AI, but also I would personally not take the bet that AI will be in this state in 5 years time. So assuming Banks and other lenders are as skeptical as I am, they wouldn't lend, or would request a bigger entity guarantee the loan.

>brutal punishments for such behavior

Brutal punishments for failing to ramp up production? Or for not lowering prices for no reason? I really dont understand

Re: DRAM prices are spiking, but I don't trust the industry's why

#122

Post by jpdb »

Dylan16807 wrote: post #117
tonyhart7 wrote: post #107

Earlier quoted context omitted.

if its what it takes then so be it which company achieve AGI first would be a quadrillion company

If you make something that's as smart as a sloppy intern and costs ten thousand dollars an hour to run, you're not going to make any money off of it.

But if you make something that's as smart as a sloppy intern and costs even a small amount less, you're making an unbelievable amount of money off it.

Re: DRAM prices are spiking, but I don't trust the industry's why

#123

Post by gruez »

Tadpole9181 wrote: post #94
gruez wrote: post #32

Earlier quoted context omitted.

Can you blame them, though? Between the notorious boom-and-bust cycle of semiconductor industry, and everyone (including much of this forum) thinking that AI is a bubble that will crash any minute, is it really that unreasonable that they're not trying to massively ramp up supply?

Yes, I can absolutely blame companies for illegally coordinating supply reductions to raise their prices on a captured market, and in this case accidentally causing a global supply crisis in doing so. Especially when those companies were already caught doing it multiple times over and told to stop.

>Yes, I can absolutely blame companies for illegally coordinating supply reductions

There's no evidence that they're coordinating, though.

Re: DRAM prices are spiking, but I don't trust the industry's why

#124

Post by gruez »

lazide wrote: post #74
gruez wrote: post #32

Earlier quoted context omitted.

Can you blame them, though? Between the notorious boom-and-bust cycle of semiconductor industry, and everyone (including much of this forum) thinking that AI is a bubble that will crash any minute, is it really that unreasonable that they're not trying to massively ramp up supply?

Like drug or oil cartels (OPEC), the reasons are obvious and reasonable, but also we don’t like to be grabbed by the balls. Both parties can have perfectly rational reasons to both exist and hate each other at the same time.

>but also we don’t like to be grabbed by the balls.

They also don't like being "grabbed by the balls" in a few years time when demand inevitably recedes. It's pretty obvious that people here are throwing a temper tantrum because they need to pay more, and companies aren't rushing in to raise supply, even if they themselves admit such actions would be dumb.

Re: DRAM prices are spiking, but I don't trust the industry's why

#125

Post by Spooky23 »

legitster wrote: post #13

What's happening right now is very different than what happened back during the dot com crash. When they were doing price fixing it was because there was a glut of supply and demand was tanking. Prices were falling and they coordinated to keep prices from falling less. Right now demand for DRAM is extremely high bordering on endless. Prices are going up . The incentive for one of the big players to undercut the other…

I think implying that the DRAM makers are nefarious is nuts. What would you do in their shoes?

You have to think about what’s happening in the context that its 2025. The US is different… there is no functional financial regulator. The CEO of OpenAI is trying to corner the market and be too big to fail. We’re seeing crazy stock swings with Oracle (whose CEO quit after the September stock event), AMD, Intel, etc. Much of the action is fueled by the circular relationships with OpenAI. Add the drama of malevolent players like Elon & POTUS.

If you’re the CEO of Micron, you’re in a tough spot. You have constrained capacity, delays in your new fab buildout that puts it out of play, and a market that is lucrative, but may be a massive Enron type event.

The people making the shovels need to hold tight. There’s no reason to collude. The smart move is to keep on trucking.

Re: DRAM prices are spiking, but I don't trust the industry's why

#126

Post by walterbell »

gruez wrote: post #123
Tadpole9181 wrote: post #94

Earlier quoted context omitted.

Yes, I can absolutely blame companies for illegally coordinating supply reductions to raise their prices on a captured market, and in this case accidentally causing a global supply crisis in doing so. Especially when those companies were already caught doing it multiple times over and told to stop.

>Yes, I can absolutely blame companies for illegally coordinating supply reductions There's no evidence that they're coordinating, though.

Memory of previous investigation.

Re: DRAM prices are spiking, but I don't trust the industry's why

#127

Post by zarzavat »

kristianp wrote: post #111
zarzavat wrote: post #72

Earlier quoted context omitted.

There's no way that Apple pays spot. They will have contracts directly with the manufacturers, guaranteeing them a given supply at a given price. Their whole business kinda depends on it.

Sure, but eventually the contracts will be renewed at possibly a much higher price. It depends on the details of the agreement whether the price is adjusted based on market price periodically too.

If I have a potato field, the cost to me of a potato is whatever equipment and labor it takes to farm one, divided by the yield of potatoes.

If there's suddenly a potato famine, then the cost to other people who don't have a potato field is however much they are willing to pay to avoid starving.

Apple doesn't have a potato field, but what they do have is a ton of negotiating power, market share, and enduring relationships with the manufacturers.

There's also the implicit threat when negotiating with Apple that they might enter your market if you fuck around with them. If Apple perceived DRAM/NAND prices to be a significant threat to their carefully curated pricing structure, they might decide that they need to vertically integrate.

Re: DRAM prices are spiking, but I don't trust the industry's why

#128

Post by blackoil »

casey2 wrote: post #93
legitster wrote: post #13

What's happening right now is very different than what happened back during the dot com crash. When they were doing price fixing it was because there was a glut of supply and demand was tanking. Prices were falling and they coordinated to keep prices from falling less. Right now demand for DRAM is extremely high bordering on endless. Prices are going up . The incentive for one of the big players to undercut the other…

Supply and demand "theory" being used yet again to justify obvious price fixing.

If fixing, Why now? Why this much?

Re: DRAM prices are spiking, but I don't trust the industry's why

#129

Post by tmikaeld »

vlovich123 wrote: post #26
tmikaeld wrote: post #21

I expected that this was because China use DDR5 in their new AI chips (Due to not having access to (enough) HBM)

HBM is independent of the DDR revision being used. HBM how the DRAM attaches to the chip. Really not sure what you’re trying to say.

HBM stacks multiple DRAM dies vertically on top of each other (typically 4-12 layers). It’s very different from DDR, especially during manufacturing because it has to be integrated with custom chips. Afaik, this isn’t available to Chinese foundries.. yet.

Thus, they have DDR available. Specifically, theyre using LPDDR5 so far.

Re: DRAM prices are spiking, but I don't trust the industry's why

#130

Post by pabs3 »

ffsm8 wrote: post #64
vablings wrote: post #55

Earlier quoted context omitted.

The biggest issue here is that it hurts smaller consumers. Scaling up a fab to produce ram takes 5+ years, people generally buy new hardware ~5 years so this lifecycle of hardware for some people is now locked out. Let's say you was due for an upgrade this year you now might be priced out of the market for the next 5 years and basically due to poor business practices There is a similar issue happening in the manufact…

Do people really still upgrade so often? I mean it made sense pre 2015 for desktops, and pre 2020 for laptops... But since... Not much has changed from a performance standpoint. Even gpus hardly advanced since 2022 (4090) and the next generation is at least 1++ years off. Likely 2-3... And it's unclear wherever it will actually be an upgrade or more of the AI shenanigans they released with the 50 generation.

I'm still on a 2013 desktop I found in a dumpster, its mostly fine still, apart from ballooning memory use in browsers.
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