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Fabs seem like a classic example where the market will trend to a monopoly. Each generation makes fabs themselves more expensive along with the incremental R&D
by lumost 6y ago
Fabs seem like a classic example where the market will trend to a monopoly. Each generation makes fabs themselves more expensive along with the incremental R&D . As each generation largely obsoletes the previous, the price of being second goes up.
- 8fhdkjw039hd 6y agoDrexlarian nanotechnology?
- magicsmoke 6y agoAlso a perfect case study of where the free market worldview and the nation-state worldview bump heads. The free market tends towards a single global monopoly for these highly capital intensive industries in the name of economic efficiency, but this inevitably erodes the sovereignty and independent action of countries that have to depend of the good graces of wherever this monopoly has its HQ.
- nickpp 6y agoUntil a startup with an innovation in fabrication itself comes along disrupting the industry and rendering all those incumbent investments suddenly obsolete. Happened again and again. In free markets, of course. Even if they may trend to, only controlled markets reach monopoly.
- sudosysgen 6y agoMaybe after twenty to fourty years this will happen. So far, this hasn't happened in this field.
- lumost 6y agoThere are plenty of counter examples, and I'd dare say the majority of notable historical "true" monopolies were disrupted due to government intervention rather than disruption. While intel has had a process lead for decades, they've never had a monopoly on fabrication.
- nickpp 6y agoDo you have some examples? Any monopoly I know of was government granted, usually through regulations. I actually know of much more examples of disruption... Now the market can arrive to a state of monopoly due to some powerful player, but as long as the startup mechanism is functioning, competition will arrive and disrupt.
- lumost 6y agoStandard Oil, US Steel, AT&T are the best known examples in the US. None of these (including AT&T) were government granted. They also share a few key traits 1) They dominated their "primary" markets 2) Their primary market was deep, and competing with them was cost prohibitive for any economic entity as in lose the GDP of a small country expensive.
- nickpp 6y agoOk, I can’t talk about the first two because, frankly, it’s been a while. But AT&T - you kidding me?! It was illegal to even bring your own phone device to their network! It was a classical example of government protected monopoly. A free market will break its own monopolies. A market corrupted by government regulation will need government intervention.
- lumost 6y agohttps://en.wikipedia.org/wiki/Kingsbury_Commitment https://en.wikipedia.org/wiki/Kingsbury_Commitment has a useful summary of the 5 attempts made by the government to curb AT&T's market power. With regards to it being illegal to connect to the phone system with your own device... this was a notion pushed by AT&T's legal, and operations teams. https://en.wikipedia.org/wiki/Carterfone https://en.wikipedia.org/wiki/Carterfone has some useful context on the regulatory decisions which compelled AT&T to allow third party devices on "their" network. Ultimately large monopolies contort the institutions, governments, and legal systems they are surrounded by. You wouldn't believe that a Trillion dollar corporation would argue for legislation that wasn't in their favor.
- MichaelZuo 6y agoIt seems that any activity where R&D is a significant chunk trends towards a monopoly.