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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

#221

Post by baobabKoodaa »

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.

Best of luck with your folksy mom & pop DRAM factory.

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

#222

Post by jsiepkes »

tirant wrote: post #212
arnaudsm wrote: post #188

Earlier quoted context omitted.

That's economical theory, but the real world is often non-linear. Crucial is dead. There's a finite amount of rare earth. Wars and floods can bankrupt industries, supply chains are tight.

Those are all temporary events and circumstances. If the market is big enough, competitors will appear. And if the margins are high enough, competitors can always price-compete down to capture market-share.

Competitors will appear? You can't build a DRAM production facility in a year. You probably even can't in two years.

Also, "price-compete down to capture market-share"? Prices are going up because all future production capacity has been sold. It makes no sense to lower prices if you don't have the capacity to full fill those orders.

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

#223

Post by Imustaskforhelp »

marcyb5st wrote: post #161
jstanley wrote: post #155

Earlier quoted context omitted.

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.

That assumes that supply production means can scale up instantly. Fabs for high end chips don't and usually take years from foundations being laid to First chip out of the production line. In the interim, yeah, they will force prices up. Additionally those fabs cost billions. Given the lead time I mentioned a lot of companies won't start building them right away since the risk of demand going away is high and the ROI…

I think one of these fab compaies have already invested/talked about investing 700 BILLION dollars (I think it was micron? but I am not sure)

I have heard that in the fab making industry, things moves in cycles and this cycle has been repeated so many times and the reason that ram is so expensive was that at one time during covid there was shortage so they built more factories and they built so so many that these companies took a hit in stocks so they then went and closed and at just the bottom of their factory production levels, the AI bubble started to pop in and need their ram's and now they are once again increasing factory levels

And after the supply due to AI gets closed with the additional compute etc., I doubt it

I think that within 2-3 or maybe 4 years of timeframe ram will get cheaper imo.

The problem is, if someone can fill the market till that time.

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

#224

Post by llukas »

p0w3n3d wrote: post #181
arjie wrote: post #97

DRAM spot prices are something like what they were 4 years ago. Having RAM for cheap is nice. But it doesn't cost an extraordinary amount. I recently needed some RAM and was able to pick up 16x32 DDR4 for $1600. That's about twice as expensive as it used to be but $1600 is pretty cheap for 512 GiB of RAM. A 16 GiB M4 Mac Mini is $400 right now. That covers any essential use-case which means this is mostly hitting hob…

> A 16 GiB M4 Mac Mini is $400 right now Where do you live? In Poland it's 740usd. However, 16gb is very little for a Mac where the OS itself uses 7GB

It is perfectly usable for essential use cases. This thing also has very fast swap and is good at it.

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

#225

Post by kubb »

baobabKoodaa wrote: post #216
testbjjl wrote: post #170

Earlier quoted context omitted.

> 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) Some might conclude the same for funds (hedge funds/private equity) and housing.

I'm confused. When you say that hedge funds "price out" regular people, what do you mean? Price out of what?

Of the housing market? That seems to be what GP said, doesn’t it?

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

#226

Post by motbus3 »

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 segment they dominate? They could raise the prices for the consumers if they are not worried about competition...

There is a whole "not-exactly" ai industry labeled as AI that received a capital t of money. Is that what they are going for?

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

#227

Post by Imustaskforhelp »

elorant wrote: post #219
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.

Affordable computing is what created the economy. If you take that away people in poorer countries can no longer afford a phone. Without a phone a lot things that we consider a given will not be functional anymore. The gaming industry alone including phones is a whooping $300bn. This will take a significant hit if people have to pay a fortune to build a rig, or if their phones are so under-powered that they can't eve…

I really agree with your statement and people forget, but the reason third world countries are able to buy devices is because they are cheap, increase the ram price and thus every computing device and I think it will impact everyone of us but disproportionately due to power purchasing capacity and other constraints in an economy

I genuinely hope that this ram/chips crisis gets solved ASAP by any party. The implications of this might have a lot of impact too and I feel is already a big enough financial crisis itself if we think about it coupled with all the other major glaring issues.

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

#229

Post by kubb »

nemomarx wrote: post #160
i80and wrote: post #150

Earlier quoted context omitted.

Just so we're clear, the voter base of over a year ago asked for this because they were actively lied to, and were foolish enough to believe said lies. Current polling however says the current voter base is quite unhappy with how this is

People spend a lot more effort and money lying to the voter base during election years than during the rest of the time.

And the money required to change the voter’s minds is peanuts.

You don’t need to make them happy, just scared of the opposition.

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

#230

Post by coderenegade »

YetAnotherNick wrote: post #178
dandanua wrote: post #164

Earlier quoted context omitted.

in a fairy world

No just stop being cynical. The reason almost every electronic item is cheaper now than 2 decades back is just becuase the demand(and thus supply) is higher.

I can't tell if this is sarcasm or not. I'd argue it's more the result of the CCP bankrolling the Chinese electronics industry to the point where roughly 70% of all electronics goods are produced in China. The concentration of expertise and supply chains is staggering, and, imo, was really born out of geopolitical strategy.
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