4 ms·

I noticed that too. What does it mean? That demand is sinking or that costs are going down?

by shmerl 3y ago

dragontamer 3y ago
Computer parts are always high-margin. They're made out of purified sand after all, the raw materials of chips is excessively cheap. The ultimate price that consumers pay is very much related to demand and less about costs. The economics of chips is very interesting: its very expensive to design and develop a chip. But making additional copies of chips (or mass producing any design, really) is extremely cheap. ------------- So yes, computer parts will go up in price mostly in reaction to demand. And they'll go down in price mostly in reaction to demand. The long-term investment into computers is not guaranteed however. It takes $Billions to design a modern chip, which is the hard part in practice. To run a computer company means to sell enough chips to fund the next generation. But for any given week or day of the year, the price of those chips can be whatever anyone feels like... really.
- mschuster91 3y ago
  > Computer parts are always high-margin. They're made out of purified sand after all, the raw materials of chips is excessively cheap. The purification and especially the lithography (aka making actual chips out of a silicon disk) is what is expensive. The machines are pricey as fuck - a single line from ASML alone costs 200 million dollars, and that's just the machines for the lithography, not including the machinery that makes the ultra pure monocrystals, that slices them, or that cuts and packages them, or the cleanrooms and the remaining support infrastructure. Or the extremely specialized staff you need to actually operate them. And it's a ton of money involved with very long lead times - say you're TSMC, you get an order for a batch of chips, and even if you had capacity starting tomorrow, the 700 steps to the final product take three months [1]. That's a massive amount of capital to be stuck for months, and errors can waste all of that. [1] https://www.seattletimes.com/business/technology/three-months-700-steps-why-it-takes-so-long-to-produce-a-computer-chip/ https://www.seattletimes.com/business/technology/three-month...
ksec 3y ago
They are ( NAND maker ) selling at a lost.

I noticed that too. What does it mean? That demand is sinking or that costs are going down?

by shmerl 3y ago

I noticed that too. What does it mean? That demand is sinking or that costs are going down?

Computer parts are always high-margin. They're made out of purified sand after all, the raw materials of chips is excessively cheap. The ultimate price that consumers pay is very much related to demand and less about costs. The economics of chips is very interesting: its very expensive to design and develop a chip. But making additional copies of chips (or mass producing any design, really) is extremely cheap. ------------- So yes, computer parts will go up in price mostly in reaction to demand. And they'll go down in price mostly in reaction to demand. The long-term investment into computers is not guaranteed however. It takes $Billions to design a modern chip, which is the hard part in practice. To run a computer company means to sell enough chips to fund the next generation. But for any given week or day of the year, the price of those chips can be whatever anyone feels like... really.

mschuster91 3y ago
> Computer parts are always high-margin. They're made out of purified sand after all, the raw materials of chips is excessively cheap. The purification and especially the lithography (aka making actual chips out of a silicon disk) is what is expensive. The machines are pricey as fuck - a single line from ASML alone costs 200 million dollars, and that's just the machines for the lithography, not including the machinery that makes the ultra pure monocrystals, that slices them, or that cuts and packages them, or the cleanrooms and the remaining support infrastructure. Or the extremely specialized staff you need to actually operate them. And it's a ton of money involved with very long lead times - say you're TSMC, you get an order for a batch of chips, and even if you had capacity starting tomorrow, the 700 steps to the final product take three months [1]. That's a massive amount of capital to be stuck for months, and errors can waste all of that. [1] https://www.seattletimes.com/business/technology/three-months-700-steps-why-it-takes-so-long-to-produce-a-computer-chip/ https://www.seattletimes.com/business/technology/three-month...

ksec 3y ago

They are ( NAND maker ) selling at a lost.