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points by 7Chinguun7 20 hours ago | 0 comments

Its because of the companies too i mean they are not making too much ram on purpose to make supply low and demand high.

No, the foundries are just redirecting production to HBM, which is in much higher demand.

Except that's nonsense, any company that could make more ram absolutely would because the damand is insane. There is no universe or economy where it would be profitable to artificially lower your production to keep prices high when you can just make more ram.

[–] Taek 20 hours ago

It depends on how much inelastic demand there is. For example:

Let's say there are 10 companies that need 1 GB of RAM each in a life-or-death scenario. They would be willing to pay $100,000,000 per GB to get 1 GB of RAM.

At the same time, there are 90 more companies that need 1 GB of RAM each to make certain quarterly targets. They are willing to pay $10,000 per GB to get 1 GB of RAM.

If you make 9 GB of RAM, you can sell it for $900,000,000. If you make 99 GB of RAM, you can only sell it for $990,000, because the 10 life-or-death companies only need to bid high enough to push out a quarterly-target company.

It's a bit of a contrived example, but it shows you how restricting supply can boost total revenue if there is a segment of the market that has inelastic demand. (this is why medicine pricing has to be regulated - in the medical industry, there are lots of inelastic demand scenarios that can lead to predatory pricing)

[–] matkoniecz 20 hours ago

We are not getting this level of scarcity yet, so that mechanism (life of death desperation of rich players) is not entering picture yet.

Also, it is not likely to happen any time soon.

We have less rich gamers deciding to not upgrade their PCs at most.

[–] galbar 17 hours ago

We have less rich gamers deciding not to buy a new PC in favour of streaming games from NVIDIA GeForce NOW.

Evidence: a friend of mine this month decided that he can't justify dropping $1.6k on a gaming computer.

As a PC gamer since I have memory, this whole situation makes me sad.

[–] IshKebab 20 hours ago

Yeah except price differentiation exists. There's a reason Nvidia doesn't allow consumer GPUs in data centres.

[–] brainwad 20 hours ago

Until making more means huge capex building extra factories. Semiconductors is famously a boom and bust industry, building too much in the boom will kill your company.

[–] gambiting 19 hours ago

Obviously, but I understood OP meant that they have capacity right now they are just choosing not to make more RAM right now.

[–] raincole 20 hours ago

Really? You never heard about how OPEC?

[–] matkoniecz 20 hours ago

OPEC that in an equivalent situation was desperately trying to increase oil production, to discourage looking for alternatives to oil? This OPEC?

[–] greggsy 20 hours ago

So… the major manufacturers, which operate across different continents with notoriously uneasy geopolitical tensions, are secretly operating a silicon cartel?

[–] chmod775 20 hours ago

You mean the exact thing that happened before involving a dozen companies and that ended with prison time and fines?

Truly an unimaginable and ludicrous suggestion in a time where regulators are less likely than ever to pursue it.

https://en.wikipedia.org/wiki/DRAM_industry_price_fixing#200...