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on Gopher (inofficial)
HTML Visit Hacker News on the Web
COMMENT PAGE FOR:
HTML CXMT has been offering DDR4 chips at about half the prevailing market rate
WhereIsTheTruth wrote 11 hours 24 min ago:
Flashbacks incoming
HTML [1]: https://www.latimes.com/archives/la-xpm-1987-03-28-mn-698-stor...
globemaster99 wrote 15 hours 50 min ago:
Most of the westerners and Americans got no idea about What they are
talking.
Chinese economy is a carefully engineered financial and industrial
capitalism, that focuses on what real people need in the real world.
American oligarchy really focus on financial engineering with profits
on stock prices and quarterly profits.
trash_cat wrote 16 hours 9 min ago:
Geopolitics and industrial policty aside, I think it's important to
check how stable and reliable these chips are. I wouldn't count on them
being on par with "western" ones. Correct me if I am wrong here.
ErneX wrote 13 hours 36 min ago:
Even Apple is looking into them as providers. And imagine what the
money Apple can provide in advance can do for their manufacturing
needs if they are serious about securing memory supply for their
product lines.
WarOnPrivacy wrote 18 hours 36 min ago:
Everyone here wants to be able to buy RAM at a reasonable price again.
After reading articles about CXMT and repeatedly reviewing the comments
here - my take is there's nothing in play that will lead to reasonably
priced RAM anytime soon.
If I'm wrong please illuminate us. We could use some hope.
walterbell wrote 17 hours 28 min ago:
Can Apple, Dell and HP lobbyists convince US regulators to lift
restrictions on working with Chinese memory manufacturers, at least
until Micron's new semiconductor fabs can ship US-made DRAM and SSDs
to US OEMs in 2028? [1] The Pentagon has withdrawn the document that
suggested updates to Section 1260H [2] | [3] Each fab will be 600,000
square feetâthe size of more than 10 football fieldsâmaking them
some of the biggest âclean roomsâ ever built in America. To
prepare the site, engineers have already blasted through more than 7
million pounds of dynamite. An army of construction workers, building
contractors and architects have set up a small cityâs worth of
trailers so they can work around the clock.
HTML [1]: https://wccftech.com/cxmt-ymtc-removed-from-pentagon-list-op...
HTML [2]: https://www.wsj.com/tech/micron-is-spending-200-billion-to-b...
HTML [3]: https://archive.is/XKSpC
hedora wrote 20 hours 1 min ago:
Back in the 1990âs everyone had to have a unix workstation for
unclear reasons (why not run Linux for < 10% the cost?).
There were crazy bubble economics schemes that meant doomed startups
got unix boxes for free.
When the bubble popped, the workstation vendors hit a triple whammy:
Inferior $/perf, unlimited used inventory at low prices, and an
economic downturn.
The same exact thing is happening now, except the hardware is being
jammed into data center models.
Anyway, when the bubble pops, people making affordable consumer stuff
will be fine (like this CXMT company).
People that went all-in on firing all non-hyperscaler customers (like
micron/crucial) will find theyâre building the wrong chips for
end-user devices, there is no server market anymore (for a few years),
and they have a total addressable market of maybe 1000 distressed
companies, globally.
I predict the people making these decisions and destroying their
companies to juice Q2 2026 financial outlook numbers will genuinely be
surprised when the bankruptcies start.
throwaway85825 wrote 15 hours 15 min ago:
They wont be allowed to go bankrupt.
walterbell wrote 23 hours 12 min ago:
[1] Apple has planned to explore cooperation with Chinese memory chip
manufacturers Yangtze Storage (YMTC) and Changxin Storage (CXMT) to
strive for more favorable supply contracts [from the big three]
HTML [1]: https://wccftech.com/apple-eyeing-a-partnership-with-chinese-m...
yanhangyhy wrote 23 hours 19 min ago:
Whenever China is mentioned, it's always about government subsidies, as
if Samsung didn't receive government subsidies when it was developing
dakolli wrote 10 hours 55 min ago:
Samsung IS the government.
throwaway290 wrote 22 hours 50 min ago:
remind me is Samsung's source subsidies also regularly attacking
every country's telecoms and infrastructure
erxam wrote 20 hours 40 min ago:
You mean the US? Yeah, they are.
throwaway290 wrote 19 hours 8 min ago:
sorry forgot Samsung is a US company
bhouston wrote 20 hours 56 min ago:
I've heard that Samsung's business practices can be quite
predatory. Basically if you have cool tech and you try to sell it
to Samsung, you'll often get a few meetings and then they will go
silent and then what you were trying to sell them will be offered
by them as a new product about a year later. At least this was the
situation like a decade ago.
I think this is because they are a huge conglomerate and there are
divisions and groups that specialize in everything and their
(Samsung) culture is to do everything as much as possible in house.
throwaway290 wrote 19 hours 9 min ago:
> you'll often get a few meetings and then they will go silent
and then what you were trying to sell them will be offered by
them as a new product about a year later
This is how business works anywhere. there are no charities.
whatever you say to investors or suppliers they can use so you
better be careful have lawyers and set up correctly.
(The caveat is of course when Chinese companies do this your
lawyers can do nothing while in a developed country you can have
some recourse)
But even if Samsung was super predatory business wise it is
beside the point. if they both get subsidies and de facto are
close to their governments then you have to look at what their
governments do. If you like what CCP is doing, it's your choice
361994752 wrote 22 hours 25 min ago:
is CXMT attacking every contry?
throwaway290 wrote 22 hours 23 min ago:
its owner and boss
but sure if they are ordered to they will, good point too;)
vkou wrote 17 hours 49 min ago:
How many countries has China bombed in, say, the last year, and
how does that compare to the other superpower (and the washed
out has-been superpower) in the room?
It's difficult to comprehend the gall and hypocrisy requires to
kvetch about this when there are four carrier strike groups
sitting in the Gulf right now.
throwaway290 wrote 16 hours 31 min ago:
what are you talking about? since when Samsung suddenly
become American? how many did South Korea bomb?
yehat wrote 9 hours 56 min ago:
dude, you're way too excited. I understand your sentiment,
but it applies for everyone these days. Just depends which
propaganda you like more.
yellowapple wrote 1 day ago:
> the average fixed contract price of PC DRAM DDR4 8Gb stood at $11.50
If that's the case, then why are the cheapest options I can find online
multiple times that much?
namibj wrote 1 day ago:
That's a small b, that's gigabit.
And that matches e.g. a "crucial pro udimm 64GB kit ddr4-3200
cl22-22-22 2Rx8" being at about 100$ a year ago.
Currently they sell here in Germany for 409⬠each, that's 6.25â¬
for half of each of the 16Gbit chips on that kit.
yellowapple wrote 19 hours 20 min ago:
> That's a small b, that's gigabit.
That explains it, thanks!
dogma1138 wrote 1 day ago:
Because thatâs just the price for the dies, still need packaging,
integration and then retail distribution. Also raw BOM is like 1/5th
of the retail price usually.
Tuna-Fish wrote 1 day ago:
Raw BOM is much higher than 1/5th of retail price for ram. Some
industries have higher margins than others.
11.5*8 = 92. I'm seeing plenty of DDR4 sticks below that price.
dogma1138 wrote 11 hours 9 min ago:
The 11.5 isnât the raw bom for the sticks thatâs the cost of
the dies.
alex43578 wrote 1 day ago:
Brent crude is $71 a barrel, but you can't buy gas for $1.69. Why's
that?
dizhn wrote 1 day ago:
Are you able to buy crude by the gallon and refine it yourself?
That would bring the cost down a bit.
bigfatkitten wrote 21 hours 57 min ago:
You can buy oil on the market and take delivery, yes. Figuring
out the logistics (tanker trucks, rail cars, storage tanks etc)
will also be your problem though.
Commodities markets arenât like eBay, nobody is just going to
FedEx you a barrel of oil.
fc417fc802 wrote 21 hours 45 min ago:
> nobody is just going to FedEx you a barrel of oil.
I'm sure someone will if you pay enough. But you certainly
won't be getting the market standard bulk price.
kristianp wrote 1 day ago:
Also moving into HBM:
> CXMT is in the process of converting wafer capacity equivalent to
about 20 percent of its total DRAM output â some 60,000 wafers per
month â at its Shanghai plant to the fourth-generation HBM3 chip
production
127 wrote 1 day ago:
The cure for high prices is high prices.
guerrilla wrote 1 day ago:
I was wondering when people would find out about CXMT. I wish them luck
and hope the US doesn't sabotage them. We need diversity and
competition right now.
decryption wrote 1 day ago:
That explains the cheap DDR4 DIMMs on AliExpress. Can get 2x 16GB
DDR4-3200 DIMMs for A$252 delivered to Australia. A local PC store has
same spec âname brandâ RAM for around $380-$400.
HTML [1]: https://a.aliexpress.com/_mssanU1
Forgeties79 wrote 1 day ago:
These prices are insane. I canât believe thatâs what constitutes
a good deal right now.
walterbell wrote 17 hours 15 min ago:
Look at pricing for hard drives, SSDs and even USB flash drives.
joshstrange wrote 13 hours 26 min ago:
This. I just had to replace a failing NVME m.2 stick, 2TB, that I
bought 4 years ago. It was over $100 more than when I bought it.
It was painful.
Forgeties79 wrote 23 hours 23 min ago:
For context, I spent $105 USD (all in) for 2x16gb DDR5 ram last
April
WarOnPrivacy wrote 22 hours 50 min ago:
2x48GB DDR5 for $285 last March.
Turns out I got the wrong kit for that build and had to buy
another. It was too late to return it.
blackoil wrote 20 hours 37 min ago:
If you still have that wrong kit, now it's the time to sell it
to make a fortune.
Forgeties79 wrote 22 hours 25 min ago:
Brutal
DoctorOetker wrote 1 day ago:
Is there a reason GPU's don't use insane "blocks" of sdcard slots (for
massively parallel io) so the model weights don't need to pass through
a limited PCI bus?
jiggawatts wrote 1 day ago:
The next gen inference chips will use High Bandwidth Flash (HBF) to
store model weights.
These are made similarly to HBM but are lower power and much higher
capacity. They can also be used for caching to reduce costs when
processing long chat sessions.
numpad0 wrote 1 day ago:
Maybe latency. IIRC flash is a lot laggier than DRAMs and SRAMs.
DoctorOetker wrote 12 hours 29 min ago:
The random access memory models is not really representative of ML
workloads (both training and inference), where multiplying large
tensors result in predictable memory access patterns.
Neywiny wrote 1 day ago:
Yes. Let's do the math. The fastest sd cards can read at around 300
MB/s ( [1] ). Modern GPUs use 16 lanes of PCIe gen 5, which is
16x32Gb/s = 512Gb/s = 64 GB/s. Meaning you'd need over 200 of the
fastest SD cards. So what you're asking is: is there a reason GPUs
don't use 200 SD cards? And I can't think of any way that would work
HTML [1]: https://havecamerawilltravel.com/fastest-sd-cards/
Dylan16807 wrote 21 hours 51 min ago:
One thing to note, those aren't the fastest SD cards, those are the
fastest UHS-II SD cards. The future is SD Express and you can
already get microSDs at 900 MB/s.
Neywiny wrote 12 hours 17 min ago:
SD expires cards are still on my watch list after seeing this [1]
. But even then, that's only 3x faster, so you're still putting
down 71 ish (I think my original number was 213.33) cards, which
means 71 PCIe PHYs and NVMe stacks.
HTML [1]: https://www.theverge.com/2021/9/9/22665216/sd-express-ca...
magicalhippo wrote 23 hours 24 min ago:
Some years ago I realized that if I had oodles of money to spend I
would totally get someone to make a PCIe card with like several
hundreds microSD cards on it.
You can buy vertical microSD connectors, so you can stack quite a
lot of them on a PCIe card. Then a beefy FPGA to present it as a
NVMe device to the host.
Goal total capacity, as you can put 1TB cards in there. And for teh
lulz of course.
15155 wrote 21 hours 1 min ago:
This isn't a very difficult thing to build, but I am curious -
what's the point? Who is the market?
magicalhippo wrote 19 hours 48 min ago:
The main point would be teh lulz as mentioned, and the market
would be me. You know, just because it's possible.
Physically easy to build, main challenge for me would be FPGA
implementation.
hedgehog wrote 1 day ago:
SD is obviously the wrong interface for this but "High Bandwidth
Flash" (stacked flash akin to HBM) is in development for exactly
this kind of problem. AMD actually made a GPU with onboard flash
maybe a decade ago but I think it was a bit early. Today I would
love to have a pool of 50GB/s storage attached to the GPU.
jiggawatts wrote 1 day ago:
First gen HBF is targeting something like 1.2 TB/s!
hedgehog wrote 1 day ago:
Oh definitely. The AMD past product just stuck 4x m.2 slots
onto the board. Today that approach would be 50-60 GB/s read
speed which would be useful enough for something that any of
the vendors could build with existing components.
alecco wrote 1 day ago:
Good news. Now we need Chinese manufacturers of DDR4 chipsets and
motherboards.
lelanthran wrote 1 day ago:
> Good news. Now we need Chinese manufacturers of DDR4 chipsets and
motherboards.
Search aliexpress for X99 dual socket motherboards.
wmf wrote 1 day ago:
Chipsets don't determine the RAM type and all motherboards have been
made in China for a while.
alecco wrote 1 day ago:
Taiwan dominates the global motherboard industry. (ASUS, Gigabyte,
MSI, ASRock, etc. and MediaTek etc)
The big Taiwanese manufacturers are chasing the AI dragon. [1] (Oct
2025)
OTOH, now I read small Taiwanese manufacturers who are left out of
the Nvidia supply chain are reverting to DDR4 motherboards because
of the DDR5 shortage. Strange times.
HTML [1]: https://www.digitimes.com/news/a20251021PD219/ai-server-as...
maxglute wrote 1 day ago:
Still no confirmation if CXMT or YMTC actually removed from entity
list, until then this is jus cheap domestic inputs.
wcoenen wrote 1 day ago:
As far as I understand, the "entity list" you are referring to is
part of the "Export Administration Regulations", so it restricts
sales from the US to restricted entities, not the other way around.
fulafel wrote 1 day ago:
Has DDR5 caught up to DDR4 latency yet? I remember it was worse at
least in the beginning. There's more bandwidth per channel but a hw
design can always add more channels for the desired BW. Not so for
latency.
kvemkon wrote 1 day ago:
> add more channels
and unfortunately increase latency even more with registered DIMMs.
Comparing bandwidth increase (50 GB/s) to the stagnated latency
(~80..120 ns total, less than ~0.1 GB/s) over last decades, I'm
wondering, whether one still can call today's RAM random memory
(though sure it can be accessed randomly). Similar to hard disk
drives. Up to 300 MB/s sequentially but only up to less than 1 MB/s
4KB random (read).
fhars wrote 1 day ago:
People have been wondering that for a while:
HTML [1]: https://news.ycombinator.com/item?id=19304281
Havoc wrote 1 day ago:
Great moment to break into the market if you're willing to forfeit
profits
7777777phil wrote 1 day ago:
DDR4 going from $1.35 to $11.50 in a year shows this market was already
distorted before CXMT showed up.
Legacy DRAM is still over half of Samsung and SK hynix's production
capacity. That's where the volume pain actually lands while they're
betting everything on HBM4.
bigbadfeline wrote 1 day ago:
A near 10 times price rise of legacy chips and surely a lot higher
profit increase couldn't motivate SKamsunix to increase their
capacity for that segment, even more, they proudly informed the
market about their decision to stop making DDR4 at the end of this
year... to focus on even higher margin products.
But they aren't going to stop whining about China, no matter how much
pain the market experiences.
Magnets wrote 1 day ago:
This is just marketing. Why would you sell at 50% of market rate?
Chinese production of NAND and DRAM is not significant, it's single
digit %
Tadpole9181 wrote 1 day ago:
> Why would you sell at 50% of market rate?
Because market rate is a 400%+ markup right now and not everyone is a
greedy American kleptocrat with a diagnosable addiction to extracting
every possible cent of wealth on the planet within a single fiscal
quarter.
simoncion wrote 11 hours 16 min ago:
Yeah. Seriously.
I can see a few other benefits to the "Sell at a reasonable markup,
rather than 'market price'" strategy.
* You get a reputation for not price-gouging.
* Your company gets used to operating with "enough" cash, rather
than having "crazy" amounts of cash that it might be tempted to
spend on misadventures.
* When the collapse of LLM Mania burns the LLM industry and its
hangers-on to the ground, you get to keep your prices the same and
keep your business practices the same... rather than scrambling to
figure out how to make do with far less cash.
deepsquirrelnet wrote 1 day ago:
Does the last part of your comment explain it? They need revenue to
expand capacity and the market has opened up a window to become a
bigger supplier while still being profitable.
amluto wrote 1 day ago:
It might be very effective marketing. The big non-Chinese OEMs trust
and use Korean and Japanese DRAM, and they might have been unwilling
to put DRAM from CXMT into their products. (CXMT is newish, does not
have access to ASML gear, which ASML would like you to believe makes
it harder to make high-quality DRAM, DRAM is historically not a very
large fraction of the cost of most non-huge-memory machines, and a
bad DIMM is an expensive mistake for a company like Dell or HPE that
is on the hook for repairs.)
But now CXMT seems to have gotten at least Dell, HP (I wonder if the
article meant HPE), Acer and Asus to buy and attempt to qualify
samples. If CXMT lands some serious purchasing agreements while still
selling well above cost, thatâs a win for them.
ThrowawayTestr wrote 1 day ago:
This decade is going to end with Chinese dominance in everything. Trump
and AI handed them everything they need on a platter.
hyperman1 wrote 1 day ago:
Western European countries got dominant, then got arrogant, letting
the USA eat their lunch.
USA got dominant, got arrogant, letting China eat their lunch.
China is indeed getting dominant. They will get arrogant one day.
Meanwhile, Western Europe and the USA are still very good places to
live.
Snoozus wrote 18 hours 17 min ago:
Exactly, there are no losers here, everyone gets lunch.
est wrote 1 day ago:
> China is indeed getting dominant. They will get arrogant one day
China was dominant. They got arrogant before 1840, then there's 100
years of humiliation.
yellowapple wrote 1 day ago:
The pertinent question, then, is who's gonna eat China's lunch?
My guess would be south/southeast Asia (India and Vietnam seem
especially promising), but if the US was smart it'd put its efforts
fully toward as many infrastructure investments and trade
agreements and immigration agreements as possible to create a
pan-American economic union. We have the resources and technology
to turn every country in North and South America into an industrial
and technological powerhouse. We have the resources and technology
to finally conquer the Darién Gap and connect North and South
America with highways and high-speed rail. We have the resources
and technology to go on the offense against drug cartels (while
also eliminating the failed border controls and drug prohibitions
that keep those cartels in business in the first place).
If we're gonna be imperialists, then by golly let's at least be
productive about it.
zozbot234 wrote 1 day ago:
China's big. It has a long way to go before all of it becomes
developed enough that they have to worry about someone else
eating their lunch.
And Latin American nations can't get started on economic
development because their governance sucks. It's actually a
decades-old problem, and not one that the U.S. can do much about.
The one country that probably has the best shot right now is
Argentina, let's see how they do.
fc417fc802 wrote 21 hours 23 min ago:
> not one that the U.S. can do much about
Are you forgetting all those times the US sabotaged various
south american governments?
nutjob2 wrote 1 day ago:
This is good news. The price you pay for jacking up your prices is
losing market share.
Once established, the Chinese vendors will retain most the market share
if the quality is ok. The SK/JP vendors are making a big mistake.
wrsh07 wrote 1 day ago:
It's not clear that raising your prices to match the supply/demand
curve is a mistake
They will compete on price if they are forced to, but they aren't
forced to right now
yellowapple wrote 1 day ago:
It ain't the price raise that's the mistake (even if that's what's
currently painful for those of us looking to buy RAM). It's the
willingness to only raise prices, and not meaningfully expand
production, that's the mistake.
Snoozus wrote 18 hours 24 min ago:
Would you build a fab that costs billions and takes years to
start production because of a bubble?
xadhominemx wrote 1 day ago:
Everyone is completely sold out and adding capacity as quickly as
possible.
ErneX wrote 1 day ago:
Are they really adding capacity?
xadhominemx wrote 1 day ago:
Yes of course. Looking at the share prices of their suppliersâ
ASML, Lam Research, Applied Materials, etc.
kvemkon wrote 1 day ago:
But since when? There are public announcements about new energy
deals since summer 2024. But I'm missing any information about
similar RAM/NAND/HDD deals back then, so that corresponding
shortages could be only for short time until, say, summer 2026.
ReptileMan wrote 1 day ago:
I am sure you can lock great prices for ram for 2035 delivery.
cmxch wrote 1 day ago:
If only on principle alone, could one secure a contract to buy
a few TB of DDR5 memory to be delivered in 2035?
And if so, how?
ReptileMan wrote 1 day ago:
Few TB probably not, but few EB I think you will be able to
make a contract.
cmxch wrote 19 hours 20 min ago:
Oh well. Just wanted to do a commitment buy to at least
say âI donât care if my RDIMMs are long obsoleteâ for
some existing DDR5 builds I have.
swed420 wrote 1 day ago:
Awesome. Hopefully storage is next.
someperson wrote 1 day ago:
As a outside observer, NAND and DRAM prices have skyrocket ed with the
AI infrastructure boom just as the China-based fabs are coming online.
It is wise for these Chinese fabs to eventually use a very aggressive
dumping strategy to price well below cost push out other players
forever, especially in DRAM.
But right now it seems they can max out their supply capacity without
selling below cost.
Appears to me like China's endless state led (often unproductive)
investment in semiconductor manufacturing subsidies (for decades) is
about to pay off with some industry dominance soon.
Like the electric vehicle sector.
gchamonlive wrote 12 hours 1 min ago:
Is China doing to DRAM what Amazon did to bookstores?
yogthos wrote 14 hours 12 min ago:
I find people tend to miss the productive aspects of Chinese state
led investments because they don't consider their value at scale.
Take the HSR system, it has been derided time and again as being
wasteful, and too expensive, and so on. Yet, now it's become a key
artery for trade and commerce across China. It allows goods to move
at an incredible speed, boosts tourism, and helps overall development
of many regions which otherwise wouldn't see much economic activity.
pclmulqdq wrote 22 hours 7 min ago:
Dumping is when you sell things for below cost. It is not dumping
when you charge a 500% markup instead of a 1000% markup, even if the
market is currently selling at that markup.
HauntingPin wrote 14 hours 16 min ago:
I thought the same but when I googled, the results disagreed with
this point of view. [1] All the laws listed there define dumping as
something being sold below the "normal price" and there being some
quantifiable harm being done to local industry of the country being
exported to.
So it has nothing to do necessarily with the cost of production,
and based on this it could be considered price dumping.
HTML [1]: https://en.wikipedia.org/wiki/Dumping_(pricing_policy)
Yohvee7u wrote 12 hours 44 min ago:
That's merely the marginalists at the WTO struggling to fit their
beliefs that value is subjective and unkowable into the reality
of commodity production.
HauntingPin wrote 9 hours 45 min ago:
Okay, so what official sources do you base your definition of
price dumping on? Nobody is asking for your opinion on what you
think price dumping is. This is a legally recognised thing, not
just some random talking point.
abtinf wrote 23 hours 42 min ago:
> It is wise ⦠to price well below cost push out other players
forever
I challenge you to name a single successful example of this that
isnât state enforced.
neves wrote 23 hours 33 min ago:
Uber
api wrote 23 hours 35 min ago:
All VC funded companies that release free or underpriced products
and services, capture market share, then raise prices or
enshittify?
The entire business model of VC funded tech?
abtinf wrote 23 hours 31 min ago:
Typically, VC funded firms are inventing new markets entirely.
Simply overcoming startup capital costs is not the argument being
made when folks claim dumping.
api wrote 22 hours 48 min ago:
They are? Most of what VC funded companies do has been done
before at a smaller scale, often with less polish and at a
higher price.
VC money is used to scale up, cut costs with scale, capture
markets, and then usually prices go up later depending on the
economics.
The Chinese state is basically just acting as a big VC fund for
Chinese manufacturing industries. A VC fund with a sovereign
currency and the ability to sustain burn-mode for decades.
It doesnât always work. There are some absurd examples of
Chinese waste produced this way like âghost cities.â But
when it works it works, and at tremendous scale, and they can
just dominate entire industries.
XorNot wrote 20 hours 29 min ago:
It's questionable whether the ghost cities truly exist
though. I was under the impression they were a product of
China's bizarre savings and investment market, and that a lot
of them have since filled up?
vkou wrote 17 hours 51 min ago:
They were a product of forward-looking planning. Those
cities were empty when built, but have since all filled up.
Meanwhile in the west we don't build anything and then are
surprised when we run into insane housing shortages.
stingraycharles wrote 23 hours 38 min ago:
Amazon?
abtinf wrote 23 hours 34 min ago:
Amazon was wildly profitable on a unit cost basis from relatively
early on. They didnât show profits on paper because they
reinvested everything into their capital buildout to reduce costs
even more.
stingraycharles wrote 22 hours 12 min ago:
I thought Amazon was selling quite a few items at a loss to
undercut competition early on?
ayewo wrote 10 hours 59 min ago:
They did in some instances, not all.
A notable example where they ate $ millions in losses is the
Diapers.com story [1] [2].
[1]
HTML [1]: https://slate.com/technology/2013/10/amazon-book-how...
HTML [2]: https://arstechnica.com/tech-policy/2020/07/emails-d...
SlinkyOnStairs wrote 1 day ago:
> It is wise for these Chinese fabs to eventually use a very
aggressive dumping strategy to price well below cost push out other
players forever, especially in DRAM.
It's not dumping, it's the opposite.
Sam Altman's stunt has created massive amounts of fictitious demand
(OpenAI isn't using those wafers it's ordering) and triggered massive
panic-buying from everyone else.
Prices are arteficially high, this has turbocharged China's fab and
R&D budgets as you observe.
> is about to pay off with some industry dominance soon.
They're not looking to dump the semiconductor markets. They're
looking to invade Taiwan.
All this buildout in their semiconductor industry is to detach
themselves from the western semiconductor industry that will either
sanction them if they invade Taiwan, or in the case of TSMC, suffer
major damage in the ensuing conflict.
That the collapse/destruction of the Taiwanese semiconductor and
electronics industries will utterly ruin the western tech industry is
somewhere between a happy coincidence and acceptable collateral
damage to them. No dumping required.
dontlaugh wrote 15 hours 37 min ago:
Why would they bother to invade Taiwan when theyâre winning
economically and diplomatically?
Public opinion in Taiwan is rapidly changing towards peaceful
re-unification and no one anywhere on earth trust the US will help
them with anything.
PowerElectronix wrote 10 hours 29 min ago:
China economic numbers don't have a winning tune to the in the
least. I don't think taiwan could ever be taken by force, but
that doesn't matter as Xi Jinping seems to think it's doable and
is taking steps towards it (developing landing ships, purging the
military of oppsition and pacifists, building a fleet and
bombers...)
It would be very surprising to me that taiwan people think a
reunification is feasable while the CCP still exists, just see
how things are going in HK to see what would be waiting taiwan if
they reunite.
fc417fc802 wrote 21 hours 52 min ago:
> utterly ruin
I realize Intel has done some serious ball dropping over the past
two decades but you do realize the US has on shore cutting edge
fabs, right? It's only luxury consumer electronics and the highest
end corporate gear that use cutting edge nodes to begin with.
Disruption of the cutting edge would certainly wreak havoc on the
pricing and specs of high end luxury electronics but that would
hardly be the end of the world. I still use a desktop with DDR3 on
a daily basis (granted the GPU is much newer with GDDR6) and my
laptop is from the early era of DDR4 ...
smw wrote 18 hours 33 min ago:
> but you do realize the US has on shore cutting edge fabs,
right?
No they don't. Even the US partnerships with TSMC aren't cutting
edge.
TSMC and arguably Samsung have cutting edge fabs, no one else.
RobotToaster wrote 1 day ago:
It's amazing what can be achieved when you can plan 5 years in
advance, instead of just making the line go up for the next quarter.
andersmurphy wrote 17 hours 4 min ago:
But, we do plan 5 years in advance. Cloud, VR, Crypto, and now AI.
All glorious five year plans from the Silicon Valley Planning
Bureau comrade.
victorbjorklund wrote 20 hours 17 min ago:
Donât forget all the times those plans fail because the world did
not turn out to be what you thought it would.
abtinf wrote 23 hours 46 min ago:
History is littered with the corpses of those slaughtered by the
millions in the name of great leaderâs 5 year plans.
HTML [1]: https://en.wikipedia.org/wiki/Great_Leap_Forward
gchamonlive wrote 12 hours 2 min ago:
History is littered with corpses. For those willing to see them.
nxobject wrote 14 hours 3 min ago:
OP's point exactly: the Great Leap Forward is the classic example
of society murdering people to make the line go up every quarter,
no matter the cost or the truth.
arcticbull wrote 16 hours 33 min ago:
Deaths in the Great Leap Forward were heavily concentrated as
compared to the Industrial Revolution but the death tolls from
IR-related famines weren't really all that far off.
Industrialization was messy everywhere.
The Irish Potato Famine alone killed 15% of Ireland vs the GLF
killing 5% of China.
That's not a reason not to plan 5 years in advance... is it? Any
more than the Potato Famine is a reason we should't have
capitalism.
I can't say that I've ever heard the argument that a plan led to
a famine therefore we should never make plans, when we have great
counterexamples that not planning also led to famine. Feels like
learning the wrong lesson here.
[edit] I also think it's worth pointing out that America's
response to the Dust Bowl was the Farm Bill, which it could be
argued is one of the largest-scale examples of central planning
in history. It continues to this day, and is part of the reason
Americans pay less as a share of their spending on food than any
other country on earth.
People say everyone remembers the hits, nobody remembers the
misses - but that is the opposite of true for government.
Everyone remembers the misses, nobody thinks twice about the
hits.
mystraline wrote 10 hours 12 min ago:
The Irish Potato Famine was a constructed starvation by England
to Ireland. All of their real foodstuffs were being stolen by
England to run world-level wars everywhere, and the Irish grew
what they were permitted to. Potatoes.
Then the disease hit.
0_____0 wrote 21 hours 33 min ago:
That's the most obvious example of failure of Chinese central
planning. That and one child policy were abysmal failures that
resulted from shoddy science coupled to effective central
authority.
Look at the 12/13/14th 5 year plan (the most recently passed). Do
you think they achieved their goals?
If your headcanon is that the CCP is inept because they caused
crop failures 60 years ago... you could stand to take a look at
what they're doing today.
mystraline wrote 10 hours 22 min ago:
Notice the go-to for capitalists against communism is "Look at
how many people they killed!!!"
No such metric is available for capitalist countries. Thats
because its *always* an individual failure in capitalism, not
political/societal.
You CHOSE not to have healthcare. (You work 1099, or work a job
that doesnt provide healthcare, due to tying job and health.)
You CHOSE to go with UnitedHealthCare that denies 30% for
baseless reasons. (The company chose your plan, you have no
real choice here.)
You CHOSE to be homeless. (You can't force companies to
interview or hire you.)
You CHOSE to eat the only food nearby (You live in a food
desert).
Just from Hepatitis C, the company that makes Solvaldi makes a
cure. Costs $84k, $1000 a pill for 84 days.
But we see more and more deaths from Hep C. But this is a
"personal failure", not a systemic one in a capitalist country.
steveBK123 wrote 9 hours 59 min ago:
"Under capitalism, man oppresses man. Under socialism, it's
just the opposite"
trueismywork wrote 13 hours 31 min ago:
One child policy has brought a demographic problem today but
has solved an existential problem in 70s
xbmcuser wrote 16 hours 46 min ago:
The big difference recently from the past is instead of
philosophers its scientists who are making the plans and
decisions in China so are willing to course correct instead
staying the course despite bad out comes.
impure-aqua wrote 13 hours 35 min ago:
I don't know if that tracks, senior leadership was heavily
influenced towards implementing the one child policy by the
works of Song Jian, who came from a rocketry background and
presented a model whereby the population would grow to an
unsustainable level unless corrective control was applied.
I think it is unlikely philosophers would have suggested to
treat population growth like tuning a PID controller.
steveBK123 wrote 10 hours 0 min ago:
A good read in this area is Dan Wang's book - Breakneck
One could probably summarize it as having engineering
leaders solve engineering problems is good, but they can
very efficiently implement very bad social policies.
Likewise having non-STEM leaders in charge of things like
agricultural planning is also bad.
That said modern China is less socialist/communist than a
weird state capitalism machine with a dictatorship.
One big difference to modern China vs USSR for example is
instead of having 1-2 car companies churning out the cars
the state demands, you have more of a competitive local
government subsidized market. So they have 50+ car
companies all competing in the local marketplace for sales,
and eventually some good car companies have surfaced. This
was never going to happen with Lada.
zozbot234 wrote 9 hours 56 min ago:
> a weird state capitalism machine with a dictatorship.
That's not a completely new model, either - Japan,
Taiwan, South Korea and Singapore all went through
remarkably similar phases. Countries have tended to
become freer and more democratic as they grow wealthy
enough to build a sustainable middle-class and a genuine
civil society that enjoys some basic independence from
government.
steveBK123 wrote 9 hours 50 min ago:
Yes, and thats where the west ended up going wrong in
our line of thinking. The assumption was if we
facilitated their transition into middle class economy
/ rich world standards via trade deals and offshoring..
they'd follow the same path as our now allies -
JP/TW/SK/SG/etc.
That is - the assumption was democracy/civil liberties
would follow wealth. This has not held up. And the
promotion of Xi to supreme leader probably for life has
if anything pulled them further away from that path.
Things like the great firewall have helped him in that
effort.
mschuster91 wrote 10 hours 1 min ago:
> I don't know if that tracks, senior leadership was
heavily influenced towards implementing the one child
policy by the works of Song Jian, who came from a rocketry
background and presented a model whereby the population
would grow to an unsustainable level unless corrective
control was applied.
The problem wasn't the idea of modeling itself, it was to
not be aware of what we know today from Africa - with more
wealth and especially less child mortality, reproduction
will drop in about one generation, even without punitive
governmental intervention. Even 60 years ago, people tended
to have anywhere from 3 to 5 children, just because the
chance was so high that at least two would simply die
before reaching adulthood.
But thanks due to better maternal healthcare, vaccinations
and OSHA, that mortality rate dropped significantly, and so
people adapted on their own - and that's before getting
into women being able to control fertility on their own or
housing/cost of living exploding in the same timeframe.
daymanstep wrote 11 hours 18 min ago:
UN birth rate projections have also been consistently wrong
for the past decades.
I think even most experts did not expect fertility rates to
follow the trend that it has been following for the past
few decades.
refulgentis wrote 19 hours 51 min ago:
If your headcanon is "5 year plans are great because some
chinese supplier has cheap DDR-4", I would submit a gentle
introduction to history is helpful (i.e. we took a couple
irrational great leaps forward from cheap DDR-4 => China owns
the RAM market => 5 year plans are the way to go)
christophilus wrote 10 hours 57 min ago:
I think itâs at least valid to conclude that a nation-level
commitment to taking over a specific industry can work. You
can gut your competitors and then dominate. Itâs the Uber
strategy applied at the geopolitical level.
If you could figure out how to get your country to dominate
the world economy without also allowing your leaders to
commit campaigns of mass-internment and extermination, then
maybe youâd have a decent political system.
zozbot234 wrote 10 hours 46 min ago:
You can only "gut" the competition if you're genuinely able
to supply at lowest cost in a sustainable way. Selling at
a loss and trying to make it up in volume is not a very
good strategy. The Uber strategy was betting on having
robotaxis everywhere, and then raising prices when they
found out that this wouldn't be a viable solution in the
near term.
ahartmetz wrote 20 hours 15 min ago:
I guess the summary is as simple as: Good five year plans are
great, bad five year plans are terrible.
There are sooo many variables in how one could go about making
and executing five year plans. They must have figured out a
couple of things that tend to work.
ceejayoz wrote 22 hours 8 min ago:
And you donât think short term profit chasing has a death
count?
nine_k wrote 23 hours 46 min ago:
Not five, but likely twenty-five. Not specific plans but attention:
situation changes all the time, but the interest remains.
maxglute wrote 1 day ago:
How's it dumping below cost when hey can simply sell for 100% margins
instead of western makers selling for 400%.
jml7c5 wrote 1 day ago:
It's easy to misread, but they're not arguing that. Note the
"eventually" and "but right now".
shimman wrote 1 day ago:
Because only western companies are allowed to make massive profits
at the expense of entire nations, it's not greed when they do it
apparently.
theLiminator wrote 23 hours 14 min ago:
Is it not the case that they're raising price in response to
demand? Ie. if they kept the price low, they'd be perpetually out
of supply?
imtringued wrote 15 hours 2 min ago:
They're raising prices in response to the same demand it has
ever been.
If they kept the price low they could still afford to make RAM.
joecool1029 wrote 21 hours 59 min ago:
No, they raise price because they can and demand isnât
showing signs of stopping despite increased prices. This
wonât affect whether thereâs a shortage or not, besides
weâre not talking direct to consumer float product, they
inked commitments.
If they didnât have a documented history of running cartel
price fixing schemes for LCD/OLED display tech, NAND, and DRAM,
Iâd maybe agree with you but we have the history. They cry
every time about China âdumpingâ for not going along with
the racket.
econ wrote 23 hours 4 min ago:
Can chose to increase production or embrace the scarcity. The
later might look delicious on paper. More profit, less effort,
less short term risk. All you have to do is ignore the whale in
the room.
fc417fc802 wrote 22 hours 7 min ago:
They are increasing production. Fabs take multiple years to
come online. The modern semiconductor industry moves only
very slowly and at very great cost.
imtringued wrote 15 hours 1 min ago:
There is no point in increasing production for a memory
standard that will be phased out next year unless you're
Chinese.
dygd wrote 1 day ago:
> It is wise for these Chinese fabs to eventually use a very
aggressive dumping strategy to price well below cost push out other
players forever, especially in DRAM.
Crucial's departure from the consumer market left such a gaping hole,
that CXMT doesn't even need to push other players out to gain a
footing.
Maxious wrote 15 hours 9 min ago:
CXMT was already an option for consumers via brands like Kingbank
and Asgard.
There's Kingbank DDR5 using CXMT modules starting to become
available in Australia [1] including from mainstream retailers like
Mwave [2]
HTML [1]: https://www.techpowerup.com/346479/hardware-unboxed-examin...
HTML [2]: https://www.mwave.com.au/memory/pc-ddr4/kingbank
HTML [3]: https://www.mwave.com.au/memory/pc-ddr5/kingbank
RobotToaster wrote 1 day ago:
It's more like everyone else abandoned the market, and CXMT
realised it was free real estate.
PearlRiver wrote 1 day ago:
Chinese investment has not been unproductive. It gave them
independence so that the US could not cut them of- see Cuba.
PowerElectronix wrote 1 day ago:
I personally fail to see the downside of any manufacturer selling
forever at a loss, except for the manufacturer itself.
gchamonlive wrote 11 hours 52 min ago:
Because it's never forever. It's until the corporation substitutes
the market, at which point you are at their mercy.
zozbot234 wrote 11 hours 36 min ago:
You're always at someone's mercy in any industry with significant
barriers to entry, you might as well pick a low-cost supplier.
gchamonlive wrote 11 hours 24 min ago:
That is such a defeatist position... How about regulation?
PowerElectronix wrote 10 hours 36 min ago:
Ask the EU how that regulate everything policy is going for
local manufacturing.
gchamonlive wrote 10 hours 22 min ago:
Is the answer to bad regulation to not regulate at all? How
EU is regulating isn't the only way to do it. And is bad
regulation that much worse than monopoly by the
billionaires? There is no distinction. At least with bad
regulation you always have the chance to vote better next
time. Good luck dealing with oligarchs.
skeeter2020 wrote 1 day ago:
First, they're not selling at a loss; the huge price increases have
allowed them to push aggrssively in the legacy markets. They're
making "slightly smaller" profits than other manufacturers (of
which there are now very few).
Second, they can drive out all competition and then have a captive
audience for whatever prices they want, as the barriers to entry in
these markets are very high. This is essentially what's happened
with all higher-end manufacturing in the west over the past 30+
years.
fph wrote 1 day ago:
Microsoft gave away Internet Explorer at a loss, and what happened
to internet standards?
creato wrote 1 day ago:
If you actually believe this, then what is your explanation for a
manufacturer to do this?
Do you think they are just stupid?
numpad0 wrote 1 day ago:
the currency eventually collapses
extraduder_ire wrote 1 day ago:
I don't know if it's still a thing, but China was getting a lot
of heat about a decade ago for purposefully devaluing their
currency to make their exports more attractive.
They kind of had to do this, because their large amount of
exports were pushing the value of it up compared to others.
xyzzy123 wrote 1 day ago:
You become dependent on the supplier.
The downside in general is that other countries lose production
capacity in steel, heavy industry, semiconductors, machine tools
etc - industries that took decades to build and can't be easily
replaced.
Also they gradually lose the ability to meaningfully innovate in
those sectors because there's no grounding against production
reality anymore.
This has geopolitical consequences further down the line.
nandomrumber wrote 1 day ago:
Blame China.
As though moving production to China wasnât something the West
did intentionally.
And now continues to push manufacturing out of Western countries
by, for example in the UK and Germany, and Australia too, making
electricity and gas so expensive it becomes cost prohibitive to
manufacture much at all.
vkou wrote 17 hours 55 min ago:
You forgot to mention embargoes against it. The US is free to
sanction firms for their exports to China, but then shouldn't
be surprised when China builds out domestic competitors.
zozbot234 wrote 1 day ago:
> The downside in general is that other countries lose production
capacity in steel, heavy industry, semiconductors, machine tools
etc - industries that took decades to build and can't be easily
replaced.
That's not really what happens though. You don't actually "lose"
capacity, you just move to higher-valued special niches within
the overall industry because (1) you can afford to, while
low-cost competitors can't and (2) you can no longer expect to be
the lowest-cost supplier for the bulk of the market. That's a
win-win development and something to be encouraged.
AnthonyMouse wrote 1 day ago:
> You don't actually "lose" capacity, you just move to
higher-valued special niches within the overall industry
That's not what people mean by "lose" capacity.
Suppose DRAM companies expand capacity because prices are high,
then demand levels off, the price crashes, and they all go out
of business except for the one in China which gets a government
bailout. That's fine, right? We're not interested in making
DRAM, that's a fungible commodity, we want to make iPhones or
something. (They make those too anymore, but never mind that.)
What happens now if China restricts what you can buy to give an
advantage to their own companies who are trying to displace you
in the higher-valued special niches? Or just raises the price
for you and not them? What if there's a trade war? Or a
conventional war?
When you still have a domestic industry, you go to them and
have a source for the commodity. If only one country becomes
the sole global supplier and that country isn't even
particularly friendly, that's bad.
PowerElectronix wrote 10 hours 40 min ago:
The way I see it, China has leverage once you arreive to that
dependency situation. That leverages goes away the moment
they restrict exports and every country scrambles to create
local production once again.
We are seeing that with some rare earths, even tho china is
back into exporting them (except to japan, I think?) everyone
is looking for alternatives already. They may have killed
their industry 10 years down the line for playing with the
export lever a bit too much.
Just like how markets punish the ram cartel creating a chance
for cxmt and ymtc to enter. It would create a chance for
western companies to do the same if china messes with the
markets they have "cornered".
zozbot234 wrote 1 day ago:
The domestic industry is still there, only instead of
mass-market DRAM it has started making higher-valued
varieties of the same stuff. If there's a trade war, they
can easily reconvert to making the mass-market stuff, just at
much higher cost. You can't expect more than that, since
they never really were as big or as low-cost as the lowest
cost suppliers can be in normal times. That's not "losing"
capacity, it's just acknowledging that you can't create
capacity out of thin air.
zelphirkalt wrote 1 day ago:
Higher valued varieties, or just higher priced varieties,
that no one wants to buy?
youarentrightjr wrote 1 day ago:
> If there's a trade war, they can easily reconvert to
making the mass-market stuff
Factories, tooling, supply chains, and engineering
knowledge aren't fungible in the way they would need to be
for your statement to be true.
timschmidt wrote 1 day ago:
Different types of DRAM can literally be made from the
same already-etched wafer. The DRAM bits themselves
don't change at all. What's different between DDR4,
DDR5, and HBM is the IO interface to the chip. Changing
this does not require significant retooling or
relearning.
AnthonyMouse wrote 17 hours 1 min ago:
> Different types of DRAM can literally be made from
the same already-etched wafer.
The assumption here is that you would stop making DDR5
but continue to make DDR4 so that you could start
making DDR5 again without too much trouble. But the
older chips have even lower margins than the newer
ones. Most of the fabs and equipment for making DDR4
were created when it was current and then they stay in
operation as long as there is still enough demand for
it.
If you don't make DDR5 and DDR6, what happens to your
DDR4 fabs when DDR4 is where DDR2 is now? They close
because nobody wants it anymore. And then you're not
trying to get to DDR6 from DDR4, you're trying to get
to DDR6 from an empty desert.
youarentrightjr wrote 23 hours 34 min ago:
> The DRAM bits themselves don't change at all. What's
different between DDR4, DDR5, and HBM is the IO
interface
That's not completely accurate - since the bw between
these are different, the routing and therefore
propagation delays for DDR4 won't allow it to magically
be used as DDR5 or HBM.
If you design for the most strict timings, then sure.
pdhborges wrote 1 day ago:
Does that mean CXMT is one inch away from also eating
into the DDR5 market?
timschmidt wrote 20 hours 37 min ago:
They're still at somewhat of a process disadvantage,
but they have demonstrated an ability to produce DDR4
on older processes than it's typically been produced
on. So it stands to reason that their process
disadvantage will not stop them from producing DDR5
at scale. Their DDR5 will just use a little more
silicon, and squeeze the jigglyness from a few more
electrons, but in this market, who cares if RAM cost
15% more to make and was 15% less efficient to run,
if it's available to purchase at all.
econ wrote 22 hours 37 min ago:
They will eventually eat everything while they laugh
at us. Why would you build a rail network if it isn't
profitable? Why build anything if it isn't
profitable? Why would you even house people if the
profit isn't guaranteed to be as big as other
sectors?
Everyone wanted denarius then escudos then guilders
then pounds then dollars and soon yuan. They make
stuff over there, you can buy it with yuan.
I think India might come after that but Africa is
sure to follow. Give it a few hundred years.
Espressosaurus wrote 1 day ago:
No, the domestic industry stagnates (at best) or disappears
(at worst).
You can't just spin up a 2nm wafer fab when the latest
you've been running is a 300nm process.
Compare: US shipbuilding industry to China or SK.
zozbot234 wrote 1 day ago:
We don't want to spin up wafer fabs because,
historically, they had a tendency to turn into Superfund
sites. That's why the more modern approach is to build
the fab in the middle of a frickin' desert.
ahartmetz wrote 20 hours 8 min ago:
Historically, but likely not anymore. You wouldn't be
allowed to casually poison the ground in a Western
factory anymore and we have the technology to keep the
environment mostly clean. I don't even see it being
very expensive compared to other fab costs. Have a
sealed floor and proper waste / exhaust processing,
don't spill in the first place. Things must be
extremely well controlled anyway.
kyralis wrote 1 day ago:
> If there's a trade war, they can easily reconvert to
making the mass-market stuff, just at much higher cost.
"easily" is doing a lot of work in that sentence. Depending
on the good and what they switch to making, this may
neither be easy nor quick.
riku_iki wrote 1 day ago:
> steel, heavy industry, semiconductors, machine tools
the question is if single country can carry all these industries
at loss for prolonged period of time.
Another approach is to rely on international supply chain and
speed of innovation, we can't produce steel domestically
profitably today, fine, we may buy it from diversified
international supplier network, and rebuild it fast tomorrow if
needed using new tech, and focus on many other high margin
verticals, instead of putting many billions of resources into
infra which could be obsolete tomorrow.
xyzzy123 wrote 1 day ago:
This is fine as long as the supply chain is, in fact,
diversified.
riku_iki wrote 1 day ago:
sure, looks like more analysis is needed to check which
verticals are diversified and which are not, instead of
throwing blanket list of everything.
xyzzy123 wrote 1 day ago:
Agree, worth analysing what is genuinely commodity.
There are more elements to it though which can be sort of
hard to explain.
There are whole cultures and ways of thinking built around
production. The children of engineers who worked on xyz
v1.0 have a genuine advantage when its time to work on xyz
v2.0. There is a lot of tacit knowledge in these
engineering fields and you have a huge advantage in
knowledge retention if you can maintain unbroken chains of
succession.
You can't achieve the top levels of ability (decades of
experience, generational knowledge) if you are whip-sawing
production to and fro across the globe every 10 years.
There are also cross pollination effects. Being in the same
community with as many related fields as possible
(co-located) is what drives cross-pollination and mobility
of ideas and people between industries.
Think how many countries have tried to copy "silicon
valley" and failed, and _why_ they failed.
What I'm saying is that technology is built by _people_ and
there are human reasons why having local capacity is
beneficial for all the related industries in the area.
esafak wrote 1 day ago:
HTML [1]: https://atlas.hks.harvard.edu/
riku_iki wrote 1 day ago:
> The children of engineers who worked on xyz v1.0 have a
genuine advantage when its time to work on xyz v2.0.
my point is that other children with no extremely heavy
investments into perl v1.0, will have some skills in c++
v1.0 and python v1.0, and will have advantage in adapting
Tensorflow v1.0, which is more valuable than skills in
perl v2.0. Heavily investing in one industry you
sacrifice some flexibility.
So, this is multifactor analysis, lets say wise American
people will elect me as next president, I would create
list of industries, assign metrics (national security
importance, potential revenue in 5y from now, impact on
other industries, potential margin, risks of failure,
etc), then build some formula which aggregate those
metrics into single, and base on final metric allocate
weighted funds to support N top industries.
nutjob2 wrote 1 day ago:
It's funny that you call this an "very aggressive dumping strategy"
while AI vendors are doing the same but with even greater losses and
on a much larger scale.
It's all simply a fight for market share.
The original sin is the existing DRAM vendors selling their entire
(spare) capacity to the likes of OpenAI.
sho wrote 21 hours 21 min ago:
Can we please stop with this irritatingly persistent myth? AI
companies, at least the big ones, do not sell inference at a loss -
far from it. This has been debunked and explained many times and
yet it keeps being repeated.
The numbers aren't public but most guesses I've heard are that
Anthropic's markup is around 50% on average, and that if considered
in isolation, most models are profitable overall. The constant
losses are instead due to training the next models, which will also
eventually recoup but later, and forward capex investment.
This idea that big AI companies are normally and systematically
selling inference at a loss as some kind of market share strategy
is just not supported by the facts.
rjh29 wrote 18 hours 18 min ago:
You talk about myths and then quote vague guesses of 50% without
sourcing.
xadhominemx wrote 1 day ago:
No one sold their capacity to OpenAI. The vast majority of DRAM is
transacted in what is essentially a quarterly auction.
nutjob2 wrote 1 day ago:
"RAM is going to AI: OpenAI has secured up to 40% of the market."
[1] You're maybe talking about the spot market, but companies are
free to make any sort of supply contract.
HTML [1]: https://globalcio.com/news/16062/
xadhominemx wrote 19 hours 53 min ago:
AI slop article
vel0city wrote 11 hours 9 min ago:
Ok here's a different analysis:
HTML [1]: https://www.tomshardware.com/pc-components/dram/open...
mrweasel wrote 1 day ago:
This feels like a classic business blunder. Focus hard on a single
business segment, leaving an opening in the market for your
competitors. Not because it wasn't profitable, but because it wasn't
profitable enough for you, right now. Only downside is that now you've
created an opening for a new player in the market.
This feels like a short coming of western business/stock market
thinking. Focusing on profit within the next few quarters, and not
caring about the longer term consequences. For all it's flaws and shady
business practises at least China can think beyond a single fiscal
year.
nirui wrote 17 hours 45 min ago:
> Focusing on profit within the next few quarters, and not caring
about the longer term consequences
Anything new? From my non-American view, American companies has done
similar things for a very long time now. It happened in the consumer
electronics, it might happen again in the IT industry.
It's not the fault of the companies, they simply just wanted more
certainty and the consumer market is not (when compare to cooperate
contracts).
But from the stand point of a nation, if no one creates low-end
products, then no one will be providing low-end/entry-level jobs.
That's when you got structural problems.
sophrosyne42 wrote 1 day ago:
There is really nothing about the stock market that means only
thinking about the mext few quarters. See all the losses on the
profit and loss statements of AI tech giants, or, say, game console
companies? Why are their stocks still valued so highly during these
periods? The answer: investors are thinking long term.
It is really impossible to have quality long term thinking without
capitalization accounting and similar instruments that come out of
the "wester" system of business that chinese free enterprise gladly
and speedily copied when it was made free.
twosdai wrote 1 day ago:
I think the sentiment here is about management's tie of bonuses to
near-term stock performance. Maybe not about the market itself, I
agree with your view on investors want long term gains over short
term fluctuations mostly.
zozbot234 wrote 1 day ago:
It's not really a blunder though. Given that total capacity is
tightly constrained, Samsung and SK Hynix are happy to focus on what
they do at their best and with the highest margins. Why shouldn't
they supply the HBM market?
m4rtink wrote 10 hours 45 min ago:
Maybe not to starve whole segments of the society and economy of
critical inputs ?
This is why we have strategy reserves - to avoid greedy companies
to make a quick buck when they find out they can sell the
equivalent of crack and dump all the other now low margin stuff
like food or other essentials.
Sure, that company might make a killing for a short while, but
people will die from hunger, missing medicine or freeze to death.
zozbot234 wrote 10 hours 41 min ago:
So let's buy a strategic reserve of DIMM sticks from CXMT. But
that's not a great strategy either, because RAM tech evolves.
DDR3 to DDR4 to DDR5 to DDR6. So you need to rotate your
strategic reserves over time, and luckily enough for you, the
used goods market is doing exactly that for free!
overfeed wrote 1 day ago:
It's putting all eggs in one basket. If/when the higher-margin
category collapses, they'll have no fallback. Imagine Chevrolet had
discontinued Impalas and other low-margin cars, and switched to
Corvettes during the pandemic
CamperBob2 wrote 1 day ago:
Good description of what actually happened. Do they even sell
any conventional 2-door passenger cars besides the Corvette these
days?
zozbot234 wrote 1 day ago:
Even if there's a collapse in the high-margin market (I don't
think anyone is expecting this right now), it will be slow and
telegraphed in advance, giving them plenty of time to refocus on
lower-margin products.
xadhominemx wrote 1 day ago:
CXMT sells the vast majority of their bits at the prevailing market
rate, just like everyone else. They are adding capacity as quickly as
they can, with a 5-10 year planning horizon, just like everyone else.
Itâs really not that deep!
orphea wrote 1 day ago:
> They are adding capacity as quickly as they can [...], just like
everyone else
Are you sure? In the past they explicitly said they are not going
to increase production.
HTML [1]: https://www.tomshardware.com/pc-components/dram/memory-mak...
washadjeffmad wrote 1 day ago:
PRC asked them to curtail DDR4 production so they didn't bottom
out the market a year or two ago, and to focus on latest gen
development, like HBM. They were the world leader in cost
efficient DDR4 production at the time.
xadhominemx wrote 1 day ago:
Yes of course their messaging to customers and the investment
community is that they will be rational and measured in their
investments. In reality, they are adding capacity as quickly as
possible as margins are too high. However, capacity addition
leading edge semiconductor manufacturing has a multi-year lead
time.
overfeed wrote 1 day ago:
> In reality, they are adding capacity as quickly as possible
[...]
Even if we ignore the fact that you can't build out factories
in secret, this would be securities fraud by publicly listed
companies.
> ...as margins are too high
This is not the first RAM boom-bust cycle, and memory makers
are an actual cartel convicted of coordinating in the past -
none if them are going to break rank when they can invest the
minimum and reap outsized benefits. Also, no one wants to
invest in additional capacity when the bottom can fall out at
anytime, and shareholders demand your head- not even the AI
companies want to bear that risk, which is saying something.
tjwebbnorfolk wrote 1 day ago:
Ok but this is how the market is supposed to work. If the incumbents
aren't doing what their customers want, then competitors can rise and
fill the gap and compete.
This isn't a shortcoming, it's a competitive market working as
intended.
127 wrote 1 day ago:
Only if you don't want or need any geopolitical gradient at all.
assaddayinh wrote 1 day ago:
Lets not forget there is no competitors. There is one competitor-
the chinese state, one huge company willing to subsidize any
endeavor that will help it fmgain more marketshare with already
captured markets.
PearlRiver wrote 1 day ago:
Everyone gets mad when Chinese do capitalism...
joe_mamba wrote 1 day ago:
NO you see, we have to hate Chinese companies because they are
unfair competitors since they get state funding from the Chinese
government, unlike Intel, Micron, TSMC, ASML, Samsung who don't
get state funding from the US, EU, Taiwan, ROK ... oh wait.
Scratch that, we have to hate Chinese companies because they do
business with the Chinese military, unlike Intel, Nvidia, Samsung
who don't do business with the US and ROK military ... oh wait.
dev1ycan wrote 1 day ago:
I know you are being sarcastic but the reason why we have to
hate Chinese is simply because the standard of living of
Americans depends on China not succeeding, simple as that.
yellowapple wrote 1 day ago:
Does it, though? If anything it seems like the opposite:
China's success had directly enabled my standard of living as
an American to be as high as it is.
I suppose it'd be true that the standard of living of some
Americans depends on China not succeeding â specifically,
those Americans who own corporations competing with Chinese
firms â but I think they'll survive just fine with only 10
yachts instead of 15.
joe_mamba wrote 1 day ago:
Well then hey can just say THAT, instead of coming up with
hypocritical BS that doesn't pass the smell test. People
internationally have enough IQ to see through the double
standards BS, especially since youtube is a thing.
And the standard of living of working class Americans has
been on a steady decline since Reagan by the hand of US
administrations, not by the hand of CHina.
This isn't defending anyone's standard of living, it's
defending profits of domestic monopolies like Micron, who
indulge in state subsidies from US taxpayers and then fuck
then over on prices.
bigyabai wrote 1 day ago:
"Why is nobody berating China?" is my favorite oft-repeated
refrain on HN.
ta9000 wrote 23 hours 19 min ago:
Theyâre too busy berating the US.
delecti wrote 1 day ago:
The market doing what it's supposed to do does not negate that the
market segment has only been left open because of overly myopic
businesses.
tjwebbnorfolk wrote 1 day ago:
The market is actively trying to solve it right now. Micron is
investing $200B in new fabs. Everyone is trying to ramp up
production.
Yes, identifying a problem is easy. But solving shortages in all
cases requires perfect knowledge of future demand. So, good luck.
qup wrote 1 day ago:
Why would we think businesses will always make the right move?
They'll blunder. They'll do it even harder in the absence of
competition.
delecti wrote 1 day ago:
Who said I thought businesses would always make the right move?
Businesses blunder. "The market" is just a set of observations,
including that competitors will tend to take advantage of those
blunders. It is not a failure of the market that businesses
have blundered, nor surprising that it will happen
occasionally, and neither I nor mrweasel implied otherwise.
estimator7292 wrote 1 day ago:
That's what modern capitalism is and it's bad for everyone
tonetegeatinst wrote 1 day ago:
More competition is always good
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