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Memory has grown to nearly two-thirds of AI chip component costs
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Re: Memory has grown to nearly two-thirds of AI chip component costs
#222Earlier quoted context omitted.
Supply and demand always balance out. There is no way manufacturers aren’t going to compete away these inflated margins, as long as they feel like this demand is sustainable.
Only in the most naive sense. If it costs you $1B and five years to build out new supply and you think demand will not sustain for more than three years, it does not make sense to expand supply. Instead you will maintain your margins currently and await demand to decrease back to your current supply. This is pretty common and as others have pointed out is even more common in markets where competition is slow and lead…
...which is presumably why GP said "as long as they feel like this demand is sustainable."
Re: Memory has grown to nearly two-thirds of AI chip component costs
#223Earlier quoted context omitted.
Supply will not meet demand. What incentive do the handful of dram manufacturers have to end the party? This is what happens when legal monopolies finally win control. Dont't worry. The patents will expire in a few decades. Our grandkids will see DDR5 get cheap again. The system functions as intended.
I have fairly simplistic view of the economics involved here. Could you explain why the ability to sell more chips wouldn't be sufficient enough incentive to increase supply?
Let's imagine you're drilling oil instead. You have to spend billions of dollars over years finding and developing a new oilfield to make any profit back. And once you have it, you have to continuously spend enormous amounts of money to keep producing it, which means your effective price floor is higher than the current stable price.
Now it's 2021 and someone gets a tanker stuck in the Suez, sending the price of oil sky-high. How long does the ship have to be stuck before you spend those billions of dollars on a bet that it'll recoup before someone gets the ship out?
Re: Memory has grown to nearly two-thirds of AI chip component costs
#224Earlier quoted context omitted.
There's very few manufacturers, I believe 3 globally? And there's a large moat. Nobody can compete with them in the next 10 years. It's really not hard to coordinate action between 3 companies.
There are trillions to be made. That moat won't be as insurmountable in hindsight.
There used to be over 50 memory manufactures in the US alone. Everytime there was a bust (following a boom) there'd be bankruptcies. The lucky ones got bought out and consolidated. Empirically, attempting to capitalize on memory booms is a losing strategy.
Re: Memory has grown to nearly two-thirds of AI chip component costs
#225Earlier quoted context omitted.
According to the recent article HBM memory is 3x less efficient wafer area wise than LPDDR; but the bandwidth is more than triple. What if its in everyone's interest to buy computers at say 1/3rd the rate and switch everything over to HBM? the discrepancy between compute and memory has been growing for ages, perhaps a painful switch to HBM is exactly what we need? Would you rather have 3 intermediate computers with l…
Not many workloads are RAM bandwidth limited. Power and latency are much more common bottlenecks, and HBM loses on both of those.
Multicore workloads do tend to hit RAM bandwidth limits before they hit power constraints. If you do the math, running at max frequency and core utilization would usually imply you could only access a byte or so per core clock cycle. Perhaps a mere handful of bytes for the highest-performance systems with in-package RAM.
Re: Memory has grown to nearly two-thirds of AI chip component costs
#226Since January, I've been lucky and picking up various used DDR4 memory sticks for cheap-ish. I got a total of 64 GB for $180. I feel like I hit the jackpot!
Re: Memory has grown to nearly two-thirds of AI chip component costs
#227Earlier quoted context omitted.
If it crashes after it kills the PC we’ll be left with… nothing? Path matters as much as destination
Apple will survive, but it's like having a car with the hood welded shut and controlled from Apple headquarters. Not much fun for hobbyists.
Apple is very far from anything gaming related - tons of games just dont work. And top tier gaming is pc gaming.
Re: Memory has grown to nearly two-thirds of AI chip component costs
#228Earlier quoted context omitted.
The risk is to the business not the consumers
There's no risk to businesses that are paying bonuses of $ 1 million, per worker, per year - like the RAM makes Samsung and SK Hynix. They are drowning in money but they don't invest in new production in order to maintain high prices. By doing so, they form a virtual trust with monopoly control over pricing. What you call "risk" for them is our best hope, China can't enter the market soon enough. Oops, the US governm…
Micron is a US company, and US did the same against Japan in the past
Re: Memory has grown to nearly two-thirds of AI chip component costs
#229Re: Memory has grown to nearly two-thirds of AI chip component costs
#230Earlier quoted context omitted.
Because RAM isn’t in PCs only. It’s in tablets, phones, laptops, DIY computers like the Raspberry, mini PCs, watches, smart TVs, game consoles, cars, routers, cameras, all smart appliances from refrigerators to washing machines, fitness trackers, printers etc. Cloud services are irrelevant to most of these categories.
A chip that produces refrigerator ram is also capable of producing hbm3 ? Don't they require retooling? Won't the same problems surface as required to establish new fabs?
They do require retooling and that's what's happening here. RAM manufacturers decided that it's way more lucrative to focus on HMB production than DDR 4/5 production. Capacity is the issue and that's capped unless you build new fabs but they won't do it because there's no guarantee that the demand will keep the same in the next years.