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CXMT has been offering DDR4 chips at about half the prevailing market rate

koreaherald.com

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Re: CXMT has been offering DDR4 chips at about half the prevailing market rate

#21

Post by xyzzy123 »

PowerElectronix wrote: post #17
someperson wrote: post #4

As a outside observer, NAND and DRAM prices have skyrocket ed with the AI infrastructure boom just as the China-based fabs are coming online. It is wise for these Chinese fabs to eventually use a very aggressive dumping strategy to price well below cost push out other players forever, especially in DRAM. But right now it seems they can max out their supply capacity without selling below cost. Appears to me like China…

I personally fail to see the downside of any manufacturer selling forever at a loss, except for the manufacturer itself.

You become dependent on the supplier.

The downside in general is that other countries lose production capacity in steel, heavy industry, semiconductors, machine tools etc - industries that took decades to build and can't be easily replaced.

Also they gradually lose the ability to meaningfully innovate in those sectors because there's no grounding against production reality anymore.

This has geopolitical consequences further down the line.

Re: CXMT has been offering DDR4 chips at about half the prevailing market rate

#22

Post by amluto »

Magnets wrote: post #19

This is just marketing. Why would you sell at 50% of market rate? Chinese production of NAND and DRAM is not significant, it's single digit %

It might be very effective marketing. The big non-Chinese OEMs trust and use Korean and Japanese DRAM, and they might have been unwilling to put DRAM from CXMT into their products. (CXMT is newish, does not have access to ASML gear, which ASML would like you to believe makes it harder to make high-quality DRAM, DRAM is historically not a very large fraction of the cost of most non-huge-memory machines, and a bad DIMM is an expensive mistake for a company like Dell or HPE that is on the hook for repairs.)

But now CXMT seems to have gotten at least Dell, HP (I wonder if the article meant HPE), Acer and Asus to buy and attempt to qualify samples. If CXMT lands some serious purchasing agreements while still selling well above cost, that’s a win for them.

Re: CXMT has been offering DDR4 chips at about half the prevailing market rate

#23

Post by xadhominemx »

ErneX wrote: post #16
xadhominemx wrote: post #13

Earlier quoted context omitted.

Everyone is completely sold out and adding capacity as quickly as possible.

Are they really adding capacity?

Yes of course. Looking at the share prices of their suppliers— ASML, Lam Research, Applied Materials, etc.

Re: CXMT has been offering DDR4 chips at about half the prevailing market rate

#24

Post by riku_iki »

xyzzy123 wrote: post #21
PowerElectronix wrote: post #17

Earlier quoted context omitted.

I personally fail to see the downside of any manufacturer selling forever at a loss, except for the manufacturer itself.

You become dependent on the supplier. The downside in general is that other countries lose production capacity in steel, heavy industry, semiconductors, machine tools etc - industries that took decades to build and can't be easily replaced. Also they gradually lose the ability to meaningfully innovate in those sectors because there's no grounding against production reality anymore. This has geopolitical consequences…

> steel, heavy industry, semiconductors, machine tools

the question is if single country can carry all these industries at loss for prolonged period of time.

Another approach is to rely on international supply chain and speed of innovation, we can't produce steel domestically profitably today, fine, we may buy it from diversified international supplier network, and rebuild it fast tomorrow if needed using new tech, and focus on many other high margin verticals, instead of putting many billions of resources into infra which could be obsolete tomorrow.

Re: CXMT has been offering DDR4 chips at about half the prevailing market rate

#25

Post by xyzzy123 »

riku_iki wrote: post #24
xyzzy123 wrote: post #21

Earlier quoted context omitted.

You become dependent on the supplier. The downside in general is that other countries lose production capacity in steel, heavy industry, semiconductors, machine tools etc - industries that took decades to build and can't be easily replaced. Also they gradually lose the ability to meaningfully innovate in those sectors because there's no grounding against production reality anymore. This has geopolitical consequences…

> steel, heavy industry, semiconductors, machine tools the question is if single country can carry all these industries at loss for prolonged period of time. Another approach is to rely on international supply chain and speed of innovation, we can't produce steel domestically profitably today, fine, we may buy it from diversified international supplier network, and rebuild it fast tomorrow if needed using new tech, a…

This is fine as long as the supply chain is, in fact, diversified.

Re: CXMT has been offering DDR4 chips at about half the prevailing market rate

#26

Post by riku_iki »

xyzzy123 wrote: post #25
riku_iki wrote: post #24

Earlier quoted context omitted.

> steel, heavy industry, semiconductors, machine tools the question is if single country can carry all these industries at loss for prolonged period of time. Another approach is to rely on international supply chain and speed of innovation, we can't produce steel domestically profitably today, fine, we may buy it from diversified international supplier network, and rebuild it fast tomorrow if needed using new tech, a…

This is fine as long as the supply chain is, in fact, diversified.

sure, looks like more analysis is needed to check which verticals are diversified and which are not, instead of throwing blanket list of everything.

Re: CXMT has been offering DDR4 chips at about half the prevailing market rate

#27

Post by numpad0 »

PowerElectronix wrote: post #17
someperson wrote: post #4

As a outside observer, NAND and DRAM prices have skyrocket ed with the AI infrastructure boom just as the China-based fabs are coming online. It is wise for these Chinese fabs to eventually use a very aggressive dumping strategy to price well below cost push out other players forever, especially in DRAM. But right now it seems they can max out their supply capacity without selling below cost. Appears to me like China…

I personally fail to see the downside of any manufacturer selling forever at a loss, except for the manufacturer itself.

the currency eventually collapses

Re: CXMT has been offering DDR4 chips at about half the prevailing market rate

#29

Post by nutjob2 »

xadhominemx wrote: post #10
nutjob2 wrote: post #9

Earlier quoted context omitted.

It's funny that you call this an "very aggressive dumping strategy" while AI vendors are doing the same but with even greater losses and on a much larger scale. It's all simply a fight for market share. The original sin is the existing DRAM vendors selling their entire (spare) capacity to the likes of OpenAI.

No one sold their capacity to OpenAI. The vast majority of DRAM is transacted in what is essentially a quarterly auction.

"RAM is going to AI: OpenAI has secured up to 40% of the market."

https://globalcio.com/news/16062/

You're maybe talking about the spot market, but companies are free to make any sort of supply contract.

Re: CXMT has been offering DDR4 chips at about half the prevailing market rate

#30

Post by xyzzy123 »

riku_iki wrote: post #26
xyzzy123 wrote: post #25

Earlier quoted context omitted.

This is fine as long as the supply chain is, in fact, diversified.

sure, looks like more analysis is needed to check which verticals are diversified and which are not, instead of throwing blanket list of everything.

Agree, worth analysing what is genuinely commodity.

There are more elements to it though which can be sort of hard to explain.

There are whole cultures and ways of thinking built around production. The children of engineers who worked on xyz v1.0 have a genuine advantage when its time to work on xyz v2.0. There is a lot of tacit knowledge in these engineering fields and you have a huge advantage in knowledge retention if you can maintain unbroken chains of succession.

You can't achieve the top levels of ability (decades of experience, generational knowledge) if you are whip-sawing production to and fro across the globe every 10 years.

There are also cross pollination effects. Being in the same community with as many related fields as possible (co-located) is what drives cross-pollination and mobility of ideas and people between industries.

Think how many countries have tried to copy "silicon valley" and failed, and _why_ they failed.

What I'm saying is that technology is built by _people_ and there are human reasons why having local capacity is beneficial for all the related industries in the area.

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