51–60 of 81 posts
There is a futures market for DRAM and NAND for exactly this purpose. Why not just sell on the open market, and let traders and financiers and all their prediction models give you the best possible price?
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You mean those who can pay the most for them? Value is not in the picture here.
They can only pay so much because of the expectations about the generated value. Those might turn out wrong, as any expectation, but value is very much in the picture.
As long as I've been an adult, hardware was a commodity, and software was where the value was. Software could capture most of the value that was in the total supply chain. 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 alway…
wishful thinking from MU holders. These LTAs or SCAs are just hedges on the prices going even higher. Once spot prices start dropping, all of the agreements will be broken in a millisecond. The break up fees have already been paid! There's absolutely nothing the buyer has to do, but to simply not buy at the inflated old price and instead buy from someone else at the new, lower price. Does anyone really think that the…
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waiting for you[0] to lay the $10B on the table for a new DDR fab - there's only so long I can wait for a new PC for the kids [0] can actually be anyone
Well a couple Chinese RAM companies already did that a couple years ago & now they are getting the global consumer market handed on a silver platter due to the hubris and shortsightedness of the current RAM cartel.
if the chinese DRAM is any good, prices should start stabilizing... I wouldn't get my hopes up too high on them going back to the before times level anytime soon, however.
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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…
> It's funny how everyone (especially here on HN) accepted (and expected) extremely high profit margins from software businesses 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 b…
Yes exactly, and theoretically if there was a functioning market that should have driven prices way down, because the marginal cost to enter the market is so low. However, the non-functioning anti-trust laws as well as the expansion of ip laws as allowed a few enormous corporations to essentially control the market and keep prices up.
> Arguably software is much more difficult to build because it is never complete.
There are hardly any hardware companies where the hardware is ever complete. Disregarding the fact that many hardware products contain some form of software that needs to be updated. In pretty much any field hardware companies need to continue developing new revisions/improvements on the hardware to stay ahead of their competitors, however those revisions/improvements are significantly more complex to put into reality.
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> It's funny how everyone (especially here on HN) accepted (and expected) extremely high profit margins from software businesses 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 b…
> Because software you build it once and can resell it as much as you want, a stick of RAM is only sold once. Yes exactly, and theoretically if there was a functioning market that should have driven prices way down, because the marginal cost to enter the market is so low. However, the non-functioning anti-trust laws as well as the expansion of ip laws as allowed a few enormous corporations to essentially control the…
What? Software is not expansive, most of it is free. Its just that the same code can be used by more than one user, unlike hardware. The high profit margins come from economies of scale which is greater than whats possible with hardware.
> There are hardly any hardware companies where the hardware is ever complete. Disregarding the fact that many hardware products contain some form of software that needs to be updated. In pretty much any field hardware companies need to continue developing new revisions/improvements on the hardware to stay ahead of their competitors, however those revisions/improvements are significantly more complex to put into reality.
Most of the deployed hardware is complete. The RAM in my PC is complete but the software running on it needs to be updated every month or so.
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Yeah they're going to diversify... to one of the other two memory companies who will likely be raising their prices too, because why should they be suckers?
The suckers are those companies agreeing to this deal. 'Your margin is my opportunity' means prices will fall eventually once more production come on line. The invisible hand will slap their faces