41–50 of 81 posts
This is Capitalism working as intended - resources (RAM) are allocated to those which can extract most value from them (AI labs)
You mean those who can pay the most for them? Value is not in the picture here.
Now, with AI, software becomes less able to demand the margins it once did.
Meanwhile, the history of low margins of hardware have created a situation where there are so few players able to demand now software-style high margins.
Hardware has always been valuable but was unable to capture it's value. Those days might be over.
I hope this encourages people who would build software companies to look to hardware. A lot of fun challenges there. Deeply technical, interesting ones. And now solutions will pay.
Predatory. I hope the tech community remembers this and diversifies away from companies that behave this way
It's funny how everyone (especially here on HN) accepted (and expected) extremely high profit margins from software businesses, but now that hardware companies are increasing their margins to match it is suddenly outrageous. The same was reflected in engineering salaries, with software engineering salaries being often a multiple of hardware engineering ones. All this despite the fact that software businesses is argua…
Because software you build it once and can resell it as much as you want, a stick of RAM is only sold once.
> The same was reflected in engineering salaries, with software engineering salaries being often a multiple of hardware engineering ones.
Arguably software is much more difficult to build because it is never complete.
This agreement puts a floor on the price that Micron can sell their chips at, and a ceiling on the price that tech companies buy them.
Micron wants the floor, so they can invest in more fab capacity without going bankrupt if there's a memory glut.
Tech companies want a ceiling so they can keep selling their products even if there's a shortage.
If there's a glut, the tech companies will just resell these chips at a loss, or take a bath on their $22 Billion of deposits. It doesn't "lock in high prices" for consumers, just the producers.
That should be illegal.
You could argue strategic deals like this allow the manufacturers to make the massive capital investments in manufacturing capacity to increase supply.
Otherwise it might be simply too risky - and in the end you end up with lower supply and higher average price.
This is Capitalism working as intended - resources (RAM) are allocated to those which can extract most value from them (AI labs)
Yes, Capitalism is working by a mechanism where some people have access to huge fictitious resources, a.k.a. money, for whom they have never given anything equivalent in exchange, and they use those fictitious resources to outbid the other people and take possession of the real physical resources, which they can use then to make more money, in a positive feedback loop. Money was supposed to be a means by which it is…
Earlier quoted context omitted.
It feels different this time. I bet there will be a generation of PC enthusiasts that are going to remember Crucial exiting the consumer market to chase AI dollars. And similar, when they hear Micron/Samsung/Sk Hynix, they'd be wary of the price gouging. Gamer's Nexus is doing really good job exposing the DRAM cartel. https://www.youtube.com/watch?v=jVzeHTlWIDY
PC enthusiasts aren't exactly sentimental when in front of a spec sheet and a price list. Plus where else are you going to go. All manufacturers are hiking up their margin if you believe their stock prices.
Earlier quoted context omitted.
This phenomenon of "hardware companies are increasing their markets" is just a consequence of the fact that the memory market is now dominated by quasi-monopolies. Decades ago, when memory production still existed in many countries, no such margin increases would have been possible. Even now, this would not have been possible without the US government actively suppressing competition in the memory market, by sabotagi…
> is just a consequence of the fact that the memory market is now dominated by quasi-monopolies. And software isn't?