The memory shortage is causing a repricing of consumer electronics

> Walk away and do what?

There are more than 1.1 to 1.3 million businesses in the US with over 30 employees. But somehow, a person is only employable by one of them?

16.6 million Americans are self-employed.

> What I did say is that in a hypothetical world where Apple did invest in their own fabs, they'd have much better access to memory and could be selling machines with vastly more memory than their competitors today.

Okay, I understand your point. I've always taken it as given that vertically integrating DRAM fabs was one of many options available to any very large manufacturer with sufficient cash flow. However, I think your point was inaccurate. If Apple invested in their own fabs, they would not have better access to memory today, unless they ALSO did something quite irrational and overbuilt their fab's capacity by a factor of 2X or more. In terms of greater capacity, at Apple's massive scale of consuming more than a "one fab" amount of output, owning their own fabs vs ordering from fabs owned by others still requires pre-ordering their expected RAM needs ~3.5 years in advance. Regardless who owns the fab, no fab can make significantly more chips without that long lead time. The difference in lead time, total capacity and margin between a self-owned fab you started building 3.5 years ago and "pre-buying most of a fab's output 3.5 years in advance" is minimal enough to be virtually immaterial. This entire area of strategic analysis is broadly called "Build vs Buy", but it has more to do with financial and tax metrics around cash on hand, capex, amortization and return on capital. The problem we're focused on here is lead-time or supply elasticity (eg how quickly can we get a lot more DRAM than we thought we'd need and at what cost delta). And, at this scale, those dynamics aren't fundamentally changed whether you Build or Buy.

> Should they be doing this? I'm making no statement either way.

Given the dynamics, I assumed you weren't just stating that acting irrationally is always an option, but that doing so was a rational option strategically. But it's not. Even in your scenario it wouldn't have changed anything UNLESS you imagine Apple of 3.5 yrs ago was psychic and built two fabs for every one they actually expected to need - but that would have been insane. And if they were that insane, they could have accomplished very nearly the same thing by pre-buying 2X their expected RAM needs from their 3rd party suppliers. At Apple's scale, 3rd party suppliers are what we call 'virtually captive'. You're such a large customer, you're practically funding the supplier's capex. This is a serious strategic problem for such suppliers (but great for Apple).

> I appreciate this wisdom on one hand, but on the other it's comically misguided. You have no way to evaluate the decision process if the outcomes are not considered.

Yes, of course you consider the outcome as one data point. But I said you don't assess by the outcome, meaning we don't judge the decision process's ultimate validity only (or even mostly) by the outcome. It's just one element. The reason is that for highly uncertain decision spaces with unknowable key externals, you can have NOT just: 1. Optimal decision-making / successful outcome, and 2. Sub-optimal decision-making / failed outcome but ALSO: 3. Optimal decision-making / failed outcome, and 4. Sub-optimal decision-making / successful outcome. Understanding the ramifications of this matrix is crucial - especially the last two.

A key example, is the hypothetical where a crazy strategist consults an astrologer, pre-commits to 2X the projected need for fab output (whether by building/owning fabs directly or just indirectly by pre-buying one or more fab's entire output in advance). If the astrologer says "build 2X what you think you'll need" and there's an unforeseeable confluence of events 3 years later that causes a worldwide shortage of RAM, then if you overweight the outcome in assessing if your strategic planning process is optimal, you'd always just do what the astrologer says. In short, in high-risk domains, sometimes a sub-optimal decision-making process can randomly result in a successful outcome - but that's a spurious signal.

If I'm the Apple VP responsible for DRAM supply chain strategy, the question I might ask my demand-side forecasting team is to run a post mortem study of whether any data sources might have existed at the time we locked in our DRAM capacity commit which could have predicted the DRAM bubble with sufficient certainty that we would have made a different decision back then. However, I'm virtually certain the answer is "No". At Apple's scale and longevity, their teams on this are already very good. If the answer was "Yes", they'd already have done it. I understand you think "this AI thing was knowable 3.5 years ago" but hindsight is always 20/20. If you haven't done such rigorous forecasting and post mortem analysis in complex, high-risk domains with thousands of variables, not just 'known unknowns' but many 'unknown unknowns', with billions of dollars at stake - it's difficult to appreciate the full scope of the challenge. The trick is the question is not just a true/false binary of "AI will cause a run on DRAM." The real question is multiple choice and the choices are numbered 1 through 5,000 (at least). And "AI will cause a run on DRAM" is just 'possible future scenario' #3,462.

No joke, at my startup we had to inventory all our unused prototype hardware to see how much memory we could reclaim. Last month.

We are not launching our product this year. We can scrape together enough memory for shareholder and show floor demo units, but we have tens of thousands of people on the waiting list and we simply can't get that much memory at any price. What we can get would mean a $400 price bump.

What the hell do you even do?

Despite your reply obviously not being good faith, I will correct errors for others.

> Housing is not an asset to society or the economy, it's a drain that wastes money on preserving human life.

You are equivocating between asset in the sense of 'generally useful thing', and the sense I used above which is a capital good. Housing is obviously a useful thing and necessary, just as all other consumptive goods like food, clothing, etc. That makes it an 'asset' in the former sense to people (there is no such thing as useful to the economy, which is just an abstraction). But housing, food, and clothing are not assets in the latter sense. I.e., paying for housing is a consumptive act and not a productive act. There is nothing good or bad about either, the distinction is simply a distinction of economic function. Eating is important, but eating uses up resources; it is consumption. Cooking is important, but it is not eating, you don't get anything out of it until you eat; it is production. Both rely on each other, neither can be given up completely without harm.

Thus, a proper balance must be struck, because it would be foolish and self-destructive to only consume. If there was only consumption, then this would simply sacrifice your future and you would not be able to survive after you have used up what was produced before. The question is about whether you want a stable, regular, and lasting way to be able to have valuable things like housing, food, and clothing. To do that, you have to refrain from consuming your entire stock of assets, you have to refrain from using up all the resources you have. But that is what you would to if you took all the capital that companies have saved up and consumed it. The purpose of my original post was to point out that you can't look at production as if it were consumption, they have different roles and if you mistake production as an opportunity to consume, it is self-destructive.

Replying by ignoring this distinction and instead making a strawman will not prevent your perspective from being self destructive.

Really Walter? You know better than this.

First, pedantically, we did not share time with 'dinosaurs' in the sense you imply.

Secondly, pedantically, that kind of hunting was not the main source of calories for hunter-gatherers. It's more apt to imagine them as gatherers first and primarily.

Thirdly, and also pedantically, you are not describing the system of capitalism that I, and most educated people talk about when they use the word. That system has only been with us in the main for, generously, 250 years.

Critically, Thag and Grog both own the means of production for their spears and 'steaks' respectively. The necessary abstractions for capital accumulation, debt, and private ownership simply do not exist.