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DRAM manufacturers have literally been convicted of price fixing in the past why do you have to white knight for them?

by ls612 11mo ago

deleted 11mo ago
[deleted]
hollerith 11mo ago
Most of us who've been on Earth for a while know that courts often get it wrong. Even if the particular court decision you mention was correct does not mean that price fixing is the main reason or the underlying reason DRAM prices sometime go up.
- lazide 11mo ago
  They blatantly were doing it, admitted to it, and did it again later. What kind of crazy is this? Is this the ‘but he loves me, he wouldn’t hit me again’ of the tech world?
  - ls612 11mo ago
    He isn't even the only one on this thread who is making this argument lol. I'm guessing its a paid information op.
kbolino 11mo ago
Both stories can be true. The firms can coordinate by agreeing on a strategy they deem necessary for the future of the industry, and that strategy requires significant capital expenditures, and the industry does not get (or does not want) outside investment to fund it, and if any of the firms defects and keeps prices low the others cannot execute on the strategy, so they all agree to raise prices. Then, after the strategy succeeds, they have gotten addicted to the higher revenues, they do not allow prices to fall as fast as they should, their coordination becomes blatantly illegal, and they have to get smacked down by regulators.
- Y_Y 11mo ago
  > The firms can coordinate by agreeing on a strategy they deem necessary for the future of the industry As long as it doesn't fall into the "collusion" prohibitions of the relevant competition law. > “People of the same trade seldom meet … but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” Adam Smith, The Wealth of Nations (1776)
- vee-kay 11mo ago
  > The firms can coordinate by agreeing on a strategy they deem necessary for the future of the industry.. Then, after the strategy succeeds, they have gotten addicted to the higher revenues, they do not allow prices to fall as fast as they should, their coordination becomes blatantly illegal.. So said and did the infamous Phoebus cartel, to unnaturally "fix" the prices and quality of light bulbs. https://spectrum.ieee.org/the-great-lightbulb-conspiracy https://spectrum.ieee.org/the-great-lightbulb-conspiracy https://en.wikipedia.org/wiki/Phoebus_cartel https://en.wikipedia.org/wiki/Phoebus_cartel For more than a century, one strange mystery has puzzled the world: why do old light bulbs last for decades while modern bulbs barely survive a couple of years? The answer lies in a secret meeting held in Geneva, Switzerland in 1924, where the world’s biggest light bulb companies formed the notorious Phoebus Cartel. Their mission was simple but shocking: control the global market, set fixed prices, and most importantly… reduce bulb lifespan. Before this cartel, bulbs could easily run for 2500+ hours. But after the Phoebus Cartel pact and actions, all companies were forced to limit lifespan to just 1000 hours. More failure meant more purchases. More purchases meant more profit. Any company who refused faced heavy financial penalties. The most unbelievable proof is the world-famous Livermore Fire Station bulb in California, glowing since 1901. More than 120 years old. Still alive. While our new incandescent bulbs die in 1–2 years. Though the Phoebus cartel was dissolved in the 1930s due to government pressure, its impact still shadows modern manufacturing. Planned obsolescence didn’t just begin here… but Phoebus made it industrial. https://m.youtube.com/watch?v=0U5uU6nzgO8 https://m.youtube.com/watch?v=0U5uU6nzgO8
  - artimaeis 11mo ago
    The Phoebus cartel didn't collude just to make the light bulbs have a shorter lifespan. They upped the standard illumination a bulb emitted so that consumers needed fewer of them to see well. With an incandescent you have a kind of sliding scale of brightness:longevity (with curves on each end that quickly go exponential, hence the longest lasting light bulb that's so dim you can barely read by its light). The brighter the bulb, the shorter the lifespan. https://www.youtube.com/watch?v=zb7Bs98KmnY https://www.youtube.com/watch?v=zb7Bs98KmnY
ksec 11mo ago
And I am 100% sure a lot of other industries in commodities would have been convicted of price fixing if we look into it. And I say this as someone who have witnessed it first hand. Unfortunately commodity business is not sexy, it doesn't get the press, nor does it get told even in business schools. But a lot of the times these call called price fixing is a natural phenomenon. I wont even go into what get decided in court doesn't always mean it is right. I will also add we absolutely want the DRAM and NAND or in fact any industries to make profits, or as much profits as it could. What is far more important is where do they spend not those profits. I didn't look into SK Hynix but both Samsung and Micron spends significant amount of R&D at least try to lower the total production cost of DRAM per GB. We want them to make healthy margin selling DRAM at $1/GB, not losing money and then go bankrupt.
- ls612 11mo ago
  Look man I’m a PhD economist I know the difference between monopolistic competition and collusion. All that price fixing does is transfer monopoly rents from you and me to the DRAM cartel (or whatever industry is doing the price fixing).

DRAM manufacturers have literally been convicted of price fixing in the past why do you have to white knight for them?

by ls612 11mo ago

DRAM manufacturers have literally been convicted of price fixing in the past why do you have to white knight for them?

deleted 11mo ago

[deleted]

hollerith 11mo ago

Most of us who've been on Earth for a while know that courts often get it wrong. Even if the particular court decision you mention was correct does not mean that price fixing is the main reason or the underlying reason DRAM prices sometime go up.

lazide 11mo ago
They blatantly were doing it, admitted to it, and did it again later. What kind of crazy is this? Is this the ‘but he loves me, he wouldn’t hit me again’ of the tech world?
- ls612 11mo ago
  He isn't even the only one on this thread who is making this argument lol. I'm guessing its a paid information op.

kbolino 11mo ago

Both stories can be true. The firms can coordinate by agreeing on a strategy they deem necessary for the future of the industry, and that strategy requires significant capital expenditures, and the industry does not get (or does not want) outside investment to fund it, and if any of the firms defects and keeps prices low the others cannot execute on the strategy, so they all agree to raise prices. Then, after the strategy succeeds, they have gotten addicted to the higher revenues, they do not allow prices to fall as fast as they should, their coordination becomes blatantly illegal, and they have to get smacked down by regulators.

Y_Y 11mo ago
> The firms can coordinate by agreeing on a strategy they deem necessary for the future of the industry As long as it doesn't fall into the "collusion" prohibitions of the relevant competition law. > “People of the same trade seldom meet … but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” Adam Smith, The Wealth of Nations (1776)
vee-kay 11mo ago
> The firms can coordinate by agreeing on a strategy they deem necessary for the future of the industry.. Then, after the strategy succeeds, they have gotten addicted to the higher revenues, they do not allow prices to fall as fast as they should, their coordination becomes blatantly illegal.. So said and did the infamous Phoebus cartel, to unnaturally "fix" the prices and quality of light bulbs. https://spectrum.ieee.org/the-great-lightbulb-conspiracy https://spectrum.ieee.org/the-great-lightbulb-conspiracy https://en.wikipedia.org/wiki/Phoebus_cartel https://en.wikipedia.org/wiki/Phoebus_cartel For more than a century, one strange mystery has puzzled the world: why do old light bulbs last for decades while modern bulbs barely survive a couple of years? The answer lies in a secret meeting held in Geneva, Switzerland in 1924, where the world’s biggest light bulb companies formed the notorious Phoebus Cartel. Their mission was simple but shocking: control the global market, set fixed prices, and most importantly… reduce bulb lifespan. Before this cartel, bulbs could easily run for 2500+ hours. But after the Phoebus Cartel pact and actions, all companies were forced to limit lifespan to just 1000 hours. More failure meant more purchases. More purchases meant more profit. Any company who refused faced heavy financial penalties. The most unbelievable proof is the world-famous Livermore Fire Station bulb in California, glowing since 1901. More than 120 years old. Still alive. While our new incandescent bulbs die in 1–2 years. Though the Phoebus cartel was dissolved in the 1930s due to government pressure, its impact still shadows modern manufacturing. Planned obsolescence didn’t just begin here… but Phoebus made it industrial. https://m.youtube.com/watch?v=0U5uU6nzgO8 https://m.youtube.com/watch?v=0U5uU6nzgO8
- artimaeis 11mo ago
  The Phoebus cartel didn't collude just to make the light bulbs have a shorter lifespan. They upped the standard illumination a bulb emitted so that consumers needed fewer of them to see well. With an incandescent you have a kind of sliding scale of brightness:longevity (with curves on each end that quickly go exponential, hence the longest lasting light bulb that's so dim you can barely read by its light). The brighter the bulb, the shorter the lifespan. https://www.youtube.com/watch?v=zb7Bs98KmnY https://www.youtube.com/watch?v=zb7Bs98KmnY

ksec 11mo ago

And I am 100% sure a lot of other industries in commodities would have been convicted of price fixing if we look into it. And I say this as someone who have witnessed it first hand. Unfortunately commodity business is not sexy, it doesn't get the press, nor does it get told even in business schools. But a lot of the times these call called price fixing is a natural phenomenon. I wont even go into what get decided in court doesn't always mean it is right. I will also add we absolutely want the DRAM and NAND or in fact any industries to make profits, or as much profits as it could. What is far more important is where do they spend not those profits. I didn't look into SK Hynix but both Samsung and Micron spends significant amount of R&D at least try to lower the total production cost of DRAM per GB. We want them to make healthy margin selling DRAM at $1/GB, not losing money and then go bankrupt.

ls612 11mo ago
Look man I’m a PhD economist I know the difference between monopolistic competition and collusion. All that price fixing does is transfer monopoly rents from you and me to the DRAM cartel (or whatever industry is doing the price fixing).