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Micron locks in historically high memory prices for five years

theregister.com

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Re: Micron locks in historically high memory prices for five years

#61

Post by krustyvonklown »

nok22kon wrote: post #54
throwaway13337 wrote: post #43

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…

we have a third category now - LLMs. this is where the value is captured now

LLMs is where value capture is anticipated by the market. There's scant evidence they can capture value if they aren't relying on hardware scarcity and their own investment and contractual risks.

Re: Micron locks in historically high memory prices for five years

#63

Post by deaux »

nok22kon wrote: post #48
adrian_b wrote: post #40

Earlier quoted context omitted.

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…

so you are against lending, stock markets and investing in general? because they are all based on "give me money today and I promise I will give you more money back tomorrow"

Doesn't sound like it to me.

> where some people have access to huge fictitious resources

The "huge" adjective seems to be the core of the problem.

Re: Micron locks in historically high memory prices for five years

#66

Post by polski-g »

small_model wrote: post #6
naturalmovement wrote: post #3

Earlier quoted context omitted.

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

More production can only come online if the producers have money to do so.

Turns out Apple fucked Micron in 2023 so they couldn't expand capacity: https://9to5mac.com/2026/06/25/micron-exec-suggests-apples-a...

Re: Micron locks in historically high memory prices for five years

#67

Post by polski-g »

striking wrote: post #11
digitaltrees wrote: post #2

Predatory. I hope the tech community remembers this and diversifies away from companies that behave this way

https://en.wikipedia.org/wiki/DRAM_price_fixing_scandal > To date, five manufacturers have pleaded guilty to their involvement in an international price-fixing conspiracy between July 1, 1998, and June 15, 2002, including Hynix, Infineon, Micron Technology, Samsung, and Elpida. It is history; we have not learned; we are doomed to repeat it.

Price-fixing is illegal. Raising prices is not.

Re: Micron locks in historically high memory prices for five years

#68

Post by polski-g »

dygd wrote: post #15
baal80spam wrote: post #9

Earlier quoted context omitted.

> I hope the tech community remembers this and diversifies away Doubt it. Has it EVER happened before?

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

Those are literally the only 3 DRAM manufacturers left; all the other ones left the market over the past 15 years because the margin was too low.

Just don't buy consumer electronics for the next 3 years. You might even be able to buy a non-smart TV in the near future because of RAM prices!

Re: Micron locks in historically high memory prices for five years

#70

Post by digitaltrees »

cycomanic wrote: post #24
digitaltrees wrote: post #2

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…

Except they aren’t getting high margins through market forces. They are pushing margins into the future through contracts on sales into the next five years. And the only reason they can do that is by the leverage they have as a result of the chip shortage driven by AI. That’s an abuse of their market position.

They know that as new factories come online the current shortage will be resolved and their pricing power will disappear. I was equally critical when Microsoft used these types of contractual provisions.

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