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Lenovo Warns PC RAM Prices Will "Never" Go Back to Normal (www.thegamer.com)
submitted 3 months ago by to c/technology@lemmy.world
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[–] 60 points 3 months ago (14 children)

I wouldn't say "never," but it's very likely that RAM prices will not return to pre-AI (read: bullshit) levels. Many markets do this; hike up to crazy levels during a boom, come back down 80%, rinse and repeat.

The only thing that might put a stop to it is competition or the unicorn business that focuses upon everyday consumers and not purely profit (lol). I'm hopeful China is able to be a spoiler to this current tech hegemony, given general US hegemony is basically over, but the home computing market is probably fucked in the meantime.

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  • [–] 16 points 3 months ago* (6 children)

    maybe i'm naive, but if it's so profitable to make RAM in the long-term, why wouldn't competition emerge? I get not investing in the startup costs just for a bubble, but that's not what we're talking about here.

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  • [–] 27 points 3 months ago (3 children)

    Capital/time intensive start up costs make it a barrier to entry. This is why the prices are so high. Supply is inelastic because the producers know this is a bubble. If they do the capital intensive thing and the bubble pops before realizing the additional capacity, they are left holding the bag.

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  • [–] 15 points 3 months ago* (2 children)

    Yes, that's literally what I said about bubbles. The assertion in OP is that RAM pricing won't go back to pre-bubble prices. If that is true, RAM manufacturing will be incredibly profitable post-AI-bubble and competition should emerge eventually.

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  • [–] 6 points 3 months ago

    It takes double digit billions to start a manufacturing plant and that's when you already have people who know what to do.

    Most countries can't really afford this in their budgets and I'm saying countries because it'd be a stupid endeavour for most private enterprises to even attempt. CXMT (DRAM) and YMTC (NAND) absolutely are sponsored by China, which is the only real way to get one of those companies going these days.

    Google, Apple, etc could start their own memory companies if they wanted to. But it's a hell of an expense to justify to your investors.

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  • [–] 3 points 3 months ago

    Making RAM isn’t like making a shirt or a suitcase v it’s an extremely specialised and extremely expensive business, and this should be apparent given there are literally only 3 manufacturers in the world.

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  • [–] 1 point 3 months ago (1 child)

    Making ram is incredibly hard and expensive, that’s why there are only 3 companies in the entire world that do it. For a new company to attempt to do it now, they’d have to outlay tens/hundreds of billions of dollars and a decade before they see a cent of revenue.

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  • [–] 12 points 3 months ago (3 children)

    I'm hopeful China is able to be a spoiler to this current tech hegemony

    As awful as that sounds, I bet that's what will happen.

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  • [–] 9 points 3 months ago (2 children)

    That's what I'm guessing. The consumer market is a multi-billion dollar industry. If Micron, Samsung, and SK Hynex are too big for it now, that's them leaving money on the table for others. Smaller companies will kick up, like those in China, and they'll gladly take the money left for them. It'll just take a while for them to get there.

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  • [–] 2 points 3 months ago* (1 child)

    The thing is, are they really leaving money on the table? Higher prices means less customers, yes, but also higher profits per unit. We don't actually know right now how many people would be willing to pay these new prices: if it costs twice as much but half the customers are still fine buying it, then profit stayed the same. And with no choice, I suspect much more than half are going to pay double.

    Of course, the people who wouldn't do that are a potential market, but they are also a much lower profit margin. Comparably, that's probably not that much for these people.

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  • [–] 3 points 3 months ago

    There's a whole segment who are going unserved because of those high prices. Gamers across the board and enthusiasts, the entire consumer market, because RAM is too expensive. Someone else figures out how to make RAM at scale and undercut the fake inflation of the cartel could make billions easily. That's money sitting on the table.

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  • [–] 5 points 3 months ago (2 children)

    Why wouldn't China just charge the increased prices, same as the DRAM cartel? Primarily they want to make money.

    Unless they offer below-cost RAM for a few years to drive the competition out of business before jacking up their prices of course.

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  • [–] 1 point 3 months ago (1 child)

    Because that's not how you make money from the household consumer market. We're already there, and people aren't able to buy RAM.

    You don't make money from product that doesn't sell.

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