The memory shortage is causing a repricing of consumer electronics • Hacker News Board

Re: The memory shortage is causing a repricing of consumer electronics

#461

Post by andybak » Fri, May 22, 2026, 5:27 PM UTC

rjh29 wrote: post #258

andybak wrote: post #250

Earlier quoted context omitted.

I'm yet to see any convincing argument that inference is subsidised in any substantial way. Training and speculative expansion are where the spend is from what I can see.

A few days ago Gemini redid their rate limits, making images/audio/video generation much more expensive, shrunk limits across the board (including a new weekly limit) and added more expensive tiers. At the moment you can pay $20/month to do thousands of expensive queries a month (involving file uploads, the Pro model, extended thinking), and evidence suggests that heavy users are not profitable.

I agree that heavy users are probably not profitable but that's the way the economics of subscription services tends to work across the board.

I'm arguing that even if inference isn't profitable right now it's not orders of magnitude off. Whatever pricing emerges for models equivalent to current frontier models won't be significantly higher than the current API pricing.

There are already enough small companies without tons of VC money to burn that are serving up nearly-frontier llms at prices lower than the big players are charging. They can't all be subsidising? These are companies without any moat or any IP.

Re: The memory shortage is causing a repricing of consumer electronics

#462

Post by WarmWash » Fri, May 22, 2026, 5:30 PM UTC

d3rockk wrote: post #438

crazygringo wrote: post #436

Earlier quoted context omitted.

That's just a snarky way to describe all business investment that requires purchasing things made in the future. It's entirely normal. You could literally rewrite the quote to be about iron and about building railroads for trains and passengers that don't exist yet. See how silly that would be? Except the "profit that is mathematically impossible" part. That's just made up and false. It's entirely possible that we ar…

>Except the "profit that is mathematically impossible" part. That's just made up and false. It's entirely possible that we are actually underestimating demand, and there is going to be tons of profit. JP Morgan says $650 billion in annual revenue required to deliver mere 10% return on AI buildout is equivalent to $35 payment from every iPhone user, or $180 from every Netflix subscriber 'in perpetuity.' Very, very, ve…

Altman said months ago that they are expecting around $65/user/month from ad-supported ChatGPT. A strong hint about where they see account prices in the future.

When you run the numbers, $65/mo turns AI investment into a a 5-7 ROI, which is totally within normal bounds.

Considering there are over a billion unique weekly active users for the major labs, and demand has been relentless, it's a pretty easy sell to get investors on board.

"You pay internet, you pay phone, you pay AI".

Re: The memory shortage is causing a repricing of consumer electronics

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Post by everforward » Fri, May 22, 2026, 5:30 PM UTC

ethbr1 wrote: post #403

everforward wrote: post #396

Earlier quoted context omitted.

I think there’s a realistic chance consumer inference moves on-device. I think it really depends on marketing. My non-tech friends and family would probably be served perfectly fine by local models today, if they had a working web search tool. Their queries are often “soft” and don’t have an exact answer. My mom and aunt used it to pick a hairstyle, my mom used it to get an image of what a room would look like with p…

The economic argument in favor of cloud inference: higher utilization is always going to have a ROI for inference hardware. But maybe that hardware becomes so commoditized that it's not difficult to obtain / stuff in a box.

My argument is predicated on the assumption that mainstream hardware manufacturers will copy the way Apple and Framework have made system memory usable for inference.

In that world, a) we are already at or close to having enough memory in local devices to do inference locally, and b) that memory isn't inference-specific and can be utilized for other things. Most devices come with enough memory to do some level of inference, and some come with plenty (eg a gaming desktop probably has 32GB+ of RAM in it).

You aren't going to run Kimi on it, but I think the reality for a lot of consumer inference is that it doesn't need to be. It's going to be a lot of things that are soft, and easily answered by a search API, so the LLM really just needs to be able to skim and summarize. Going a step further, we may even see some kind of hybrid approach where a local OpenRouter kind of thing decides whether the task is soft enough to do locally with models that fit in RAM or if it needs to be farmed out to a PaaS provider.

Re: The memory shortage is causing a repricing of consumer electronics

#464

Post by andriy_koval » Fri, May 22, 2026, 5:31 PM UTC

dyauspitr wrote: post #128

LeifCarrotson wrote: post #15

What was most surprising about all this to me was this line: > So modern DRAM manufacturing is an extraordinarily complex and expensive process. Building a single state-of-the-art DRAM fabrication facility, a “fab,” will cost you about $15 to $20 billion; acquiring all the necessary equipment, like lithography tools and etching machines, will cost you another few billion; and then it’ll take you a few years of produc…

Apple, Google Microsoft Amazon should all set up memory and CPU fabs. I don’t understand why they don’t do it. $400 million ASML machine is chump change and you can almost certainly find/train locals or provide incentives to immigrants to come here as workers to fill the roles there.

fabs probably was low margin business compared to selling Ads before current AI boom.

Re: The memory shortage is causing a repricing of consumer electronics

#465

Post by Levitating » Fri, May 22, 2026, 5:35 PM UTC

Luckily innovation in smartphones has also stagnated. I just bought a 6 year old phone (Poco X3 NFC) secondhand for 60 euro. That's barely a downgrade from my Poco X7 from last year.

Poco X3 has excellent support for Ubuntu Touch, PostmarmetOS and LineageOS etc.

Re: The memory shortage is causing a repricing of consumer electronics

#466

Post by adrian_b » Fri, May 22, 2026, 5:42 PM UTC

FuriouslyAdrift wrote: post #447

Aerroon wrote: post #376

Earlier quoted context omitted.

I wonder if this is actually true in the long-term though. If they were to flood the market with lots of high capacity memory, then I think our programs would start using more memory too. As a result we might end up needing more memory faster compared to if they keep demand unmet. Just consider that a chat application today takes more memory than a full 3D game with thousands of users (including chat) + the operating…

They are running fabs at 100% capacity. New fabs take many years to build, cost billions, and are out of date within a few process moves. One cannot simply "flood the market" or the Chinese would have done it ages ago.

The Chinese memory makers have been sabotaged by USA, otherwise they would have already "flooded the market" and reduced the prices.

Even so, the production of cheaper Chinese DDR5 memory is increasing despite not being able to import all the tools and materials that are needed, so eventually they will benefit from this memory shortage that allows them to gain market share that they would not have gained otherwise.

Re: The memory shortage is causing a repricing of consumer electronics

#467

Post by hackyhacky » Fri, May 22, 2026, 5:52 PM UTC

sokoloff wrote: post #450

hackyhacky wrote: post #446

Earlier quoted context omitted.

"I can win" is not a refutation of the claim that investment is gambling in any way that matters. The more relevant question is: does investment reward productivity (i.e. skill, strength, labor) or does it reward ownership (i.e. those who have capital will continue to accumulate capital)? By your own statement, it seems the latter. All of that money that you've "earned" with investment, where do you think it came fro…

“Never lost money over any 20 year period” is a good enough refutation of investing in the S&P being gambling in any way that matters to allow me to act. Others might be more conservative and I hope they find and choose investments which match their style and risk-tolerance.

> in any way that matters to allow me to act.

I don't care how you act. That capitalism benefits the rich is not the subject of debate. This isn't /r/wallstreetbets

What is at stake us that all value is created by labor; and that the capitalist class (of which you are a member) is allowed to profit despite not producing anything at all. That makes you a parasite. Isn't that what the rich say about the poor?

Re: The memory shortage is causing a repricing of consumer electronics

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Post by jnovek » Fri, May 22, 2026, 5:54 PM UTC

giobox wrote: post #434

Aerroon wrote: post #376

Earlier quoted context omitted.

I wonder if this is actually true in the long-term though. If they were to flood the market with lots of high capacity memory, then I think our programs would start using more memory too. As a result we might end up needing more memory faster compared to if they keep demand unmet. Just consider that a chat application today takes more memory than a full 3D game with thousands of users (including chat) + the operating…

For older hacker news readers who have lived through multiple RAM price spikes - it has held true for decades so far. Making memory is one of the most vicious tech markets to compete in.

The last one I remember was after the 2011 tsunami. I think things are worse these days because memory isn’t just a chip that you toss on a board anymore, it’s now frequently delivered in the same package as the CPU.

Re: The memory shortage is causing a repricing of consumer electronics

#469

Post by CamperBob2 » Fri, May 22, 2026, 6:01 PM UTC

wing-_-nuts wrote: post #414

nickpp wrote: post #379

Earlier quoted context omitted.

Not a hobby, but a duty. I lived under both systems and I do not wish the horrors I’ve seen in my youth onto my children. Although at this point, it’s probably unavoidable. It seems that some lessons can only be learned by experiencing them, no warning is ever enough: Russia, communism.

Yes, now ask someone from a nordic country about how best to balance capitalism with regulation and social safety nets. I think you'd get a very different answer.

Step 1: start with a vast reservoir of oil revenue and a culturally-homogeneous population

Re: The memory shortage is causing a repricing of consumer electronics

#470

Post by ivewonyoung » Fri, May 22, 2026, 6:07 PM UTC

autoexec wrote: post #210

WalterBright wrote: post #160

Earlier quoted context omitted.

Some countries have walls to keep people in, some have walls to keep people out. > the idea that people can just pack up and go to live wherever they feel like is incredibly naive. That's how America was populated. In the last 5 years, millions of people walked from South America to the US. Walked! The tax increases in New York, California and Washington have resulted in an exodus of wealthy people.

America was populated by giving people land in exchange for doing the hard work of settling the country so that the government could expand farther west. The land wasn't empty before then, but it wasn't populated like it is now either. It was hard work and bodies were needed so immigration was strongly encouraged. The existence of illegal immigration today is another thing entirely. I have absolutely no problem with…

> Good riddance. If they want to act like parasites let them leech off the people some place else

That's a reactionary emotional reaction that many countries started with and failed and led to people fleeing and the govts banning people leaving. Examples include East Germany, North Korea, the eastern bloc etc.

History has shown again and again that chasing away high earners with super high taxes like doctors, tech workers, small business owners etc. leads to worse outcomes for everyone because they already pay a large share of total taxes. Also, they may quit and just collect the welfare off the high earners tax income. At the federal level the top 1% pay 40% of federal taxes, that's not even counting the jobs they create. Imagine a place trying to serve 99% of the people with only 60% of the tax revenue. They're either going to increase the taxes till there's no one left to overtax or reduce govt services which reduces govt employment leading to lower tax collection and even more welfare spending.

Taxes on things discourage the use of things, that's why high taxes on smoking and alcohol work. Supertaxing economic productivity and rewarding people sitting around not working will and has led to lower economic productivity.

https://www.nber.org/system/files/chapters/c6521/c6521.pdf

I got a lot of downvotes making these comments and ran into posting limits. HN isn't a place for debates like this, you win, socialism is amazing, everyone upvote me now.