4 ms·

Our problem is lack of competition

by christkv 5mo ago

SoftTalker 5mo ago
High prices for RAM should attract competition.
- pixl97 5mo ago
  In general, no. It takes billions to tens of billions to setup a fab. It also takes years to get it working. Then when you add in the IP for memory, it pretty much ain't happening. All the RAM monopoly has to do is wait 3 days before you're producing and drop the price and you're ruined. Meanwhile they've built up a battle chest of hundreds of billions in profits. China might be the only competition we see come out of this, but only because they are playing the long game and have trillions of US dollars to play the game with.
  - SoftTalker 5mo ago
    There are a lot of companies that have billions in cash and are also prodigious buyers of RAM. Companies like Apple, Google, Meta, Nvidia... Do they want to get into a commodity business like RAM production? Maybe not, but if prices stay high long enough that demand for their products falls off, they might think about it. I know that I personally and my employer are cutting way back on new technology purchases and squeezing as much as we can out of old equipment due to the cost of RAM and storage now.
    - cogman10 5mo ago
      And none of these companies are operating their own fabs, that's the problem. Fabs are a cutthroat business that's very hard to get into. It costs billions of continual investment to stay a float. That's why there's really only about 3 different companies with cutting edge fabs. TSMC, Micron, and Samsung. Even intel, who built a huge portion of their business on cutting edge fab tech, has struggled to keep funding it. AMD got out of the fab business almost a decade ago (spinning off global foundries) and that spin off is no longer cutting edge. AMD uses TSMC. Fabs are some of the most expensive factories to operate on this planet due to a constant need for brand new equipment and cutting edge research. That's why there's not an Apple, Google, Meta, or Nvidia fab. That's why there's not an AMD fab. That's why Intel fabs are treading water. Without the constant investment, you very quickly find yourself in the company of yet another cutthroat industry, the "not cutting edge" fabrication industry. And that, by and large, has already been locked up by about a dozen fab companies.
      - SoftTalker 5mo ago
        And a 64G DDR5 ECC DIMM costs $3K and is backordered. If ths isn't a bubble and demand persists, some new players are eventually going to want a cut of that.
        cogman10 5mo ago
        We aren't talking about making new lug-nuts. A company can't just will a fab into existence. For example, Micron is actively building a few new fabs. One of which has been in progress since Biden (pretty close to my home in fact). It's not going to be completed for another 5 years at a minimum. And this is a company that has the experience and partnerships for producing fabs. Yes, a new company might decide they want to enter the market, but even if they decided, today, "Yes we'll do this" I'd expect a minimum of a decade before they start spinning out their first chips. That's also at least a $1T investment at this point to get started.
        astrange 5mo ago
        > And this is a company that has the experience and partnerships for producing fabs. Not even they necessarily have the experience to do it! Intel has a policy called "Copy EXACTLY!" for fab construction where they make every irrelevant detail the same as their last fab, because they don't actually know which of the details matter.
        cogman10 5mo ago
        Oh for sure. A story that gets told at the micron factory is that for a long time they'd experience chip failures at increased rates. During the night it was pretty good, but during the day these random failures would creep up. After spending a lot of time studying the problem what they finally realized is they built the building too close to the interstate and vibrations from the interstate were ultimately making their way into the factory causing errors. To combat this problem, they spent millions retrofitting shock absorbers onto the building. It's not shocking that intel would do the same because even the slightest movements and vibrations can spoil the chips. Putting a restroom in the wrong spot might spoil a batch when someone flushes the toilet.
    - pixl97 5mo ago
      >a lot of companies that have billions in cash They sit on billions because they avoid spending their money as much as possible. The amount they spend on RAM in surrounding few years would represent almost nothing to the massive money hole that would happen if they tried to make their own fab. Also, these problems tend to affect the entire market, which means if you're big, you're fine. It's when problems don't affect your competitors but affect you that the real issues for these companies crop up.
- andrepd 5mo ago
  Real life is not SimCity, you can't just plonk more RAM factories like that. It takes an ungodly amount of capital investment, many years before you see a cent in return, plus there's only a couple firms worldwide that can do it in the first place.
- GeekyBear 5mo ago
  Chinese DRAM production is already getting ready to ramp up. https://www.tomshardware.com/pc-components/ram/hp-reportedly-eyes-chinese-suppliers-for-dram-as-global-shortage-sparks-shake-up-analyst-says-memory-chips-are-commodities-that-can-easily-be-replaced https://www.tomshardware.com/pc-components/ram/hp-reportedly...
  - gessha 5mo ago
    It might take a while but Chinese companies will figure out/steal/innovate into the right IP for different memory types and will cut out the American patents, ASML and East Asian fabs middle man. I can’t wait for times when I can afford chips from less than 8 years ago.
- kingstnap 5mo ago
  The only thing that can actually introduce competition in RAM is some form of government backing around national security concerns. China has been doing this for some time though so there will probably be major Chinese supply coming in the medium term.
- laughing_man 5mo ago
  The problem is every twenty years or so DRAM makers get burned by building for demand that mostly disappears overnight. They've been through it enough times that they're going to be really reluctant to build new fabs. They'll certainly put some effort into getting the absolute most out of their existing installations, but I would be surprised if you see a lot of new fabs until they decide the demand is durable.
- ceejayoz 5mo ago
  If we assume a spherical cow!
- Danox 5mo ago
  It will the Chinese, this will be the last big payday for the three company cartel and in time I think Apple will move in-house and design around.
colechristensen 5mo ago
No, it's the time, effort, and capital necessary to build cutting edge semiconductor fabs. Measured in tens of billions of dollars and decades.

Our problem is lack of competition

SoftTalker 5mo ago

High prices for RAM should attract competition.

pixl97 5mo ago
In general, no. It takes billions to tens of billions to setup a fab. It also takes years to get it working. Then when you add in the IP for memory, it pretty much ain't happening. All the RAM monopoly has to do is wait 3 days before you're producing and drop the price and you're ruined. Meanwhile they've built up a battle chest of hundreds of billions in profits. China might be the only competition we see come out of this, but only because they are playing the long game and have trillions of US dollars to play the game with.
- SoftTalker 5mo ago
  There are a lot of companies that have billions in cash and are also prodigious buyers of RAM. Companies like Apple, Google, Meta, Nvidia... Do they want to get into a commodity business like RAM production? Maybe not, but if prices stay high long enough that demand for their products falls off, they might think about it. I know that I personally and my employer are cutting way back on new technology purchases and squeezing as much as we can out of old equipment due to the cost of RAM and storage now.
  - cogman10 5mo ago
    And none of these companies are operating their own fabs, that's the problem. Fabs are a cutthroat business that's very hard to get into. It costs billions of continual investment to stay a float. That's why there's really only about 3 different companies with cutting edge fabs. TSMC, Micron, and Samsung. Even intel, who built a huge portion of their business on cutting edge fab tech, has struggled to keep funding it. AMD got out of the fab business almost a decade ago (spinning off global foundries) and that spin off is no longer cutting edge. AMD uses TSMC. Fabs are some of the most expensive factories to operate on this planet due to a constant need for brand new equipment and cutting edge research. That's why there's not an Apple, Google, Meta, or Nvidia fab. That's why there's not an AMD fab. That's why Intel fabs are treading water. Without the constant investment, you very quickly find yourself in the company of yet another cutthroat industry, the "not cutting edge" fabrication industry. And that, by and large, has already been locked up by about a dozen fab companies.
    - SoftTalker 5mo ago
      And a 64G DDR5 ECC DIMM costs $3K and is backordered. If ths isn't a bubble and demand persists, some new players are eventually going to want a cut of that.
      - cogman10 5mo ago
        We aren't talking about making new lug-nuts. A company can't just will a fab into existence. For example, Micron is actively building a few new fabs. One of which has been in progress since Biden (pretty close to my home in fact). It's not going to be completed for another 5 years at a minimum. And this is a company that has the experience and partnerships for producing fabs. Yes, a new company might decide they want to enter the market, but even if they decided, today, "Yes we'll do this" I'd expect a minimum of a decade before they start spinning out their first chips. That's also at least a $1T investment at this point to get started.
        astrange 5mo ago
        > And this is a company that has the experience and partnerships for producing fabs. Not even they necessarily have the experience to do it! Intel has a policy called "Copy EXACTLY!" for fab construction where they make every irrelevant detail the same as their last fab, because they don't actually know which of the details matter.
        cogman10 5mo ago
        Oh for sure. A story that gets told at the micron factory is that for a long time they'd experience chip failures at increased rates. During the night it was pretty good, but during the day these random failures would creep up. After spending a lot of time studying the problem what they finally realized is they built the building too close to the interstate and vibrations from the interstate were ultimately making their way into the factory causing errors. To combat this problem, they spent millions retrofitting shock absorbers onto the building. It's not shocking that intel would do the same because even the slightest movements and vibrations can spoil the chips. Putting a restroom in the wrong spot might spoil a batch when someone flushes the toilet.
  - pixl97 5mo ago
    >a lot of companies that have billions in cash They sit on billions because they avoid spending their money as much as possible. The amount they spend on RAM in surrounding few years would represent almost nothing to the massive money hole that would happen if they tried to make their own fab. Also, these problems tend to affect the entire market, which means if you're big, you're fine. It's when problems don't affect your competitors but affect you that the real issues for these companies crop up.
andrepd 5mo ago
Real life is not SimCity, you can't just plonk more RAM factories like that. It takes an ungodly amount of capital investment, many years before you see a cent in return, plus there's only a couple firms worldwide that can do it in the first place.
GeekyBear 5mo ago
Chinese DRAM production is already getting ready to ramp up. https://www.tomshardware.com/pc-components/ram/hp-reportedly-eyes-chinese-suppliers-for-dram-as-global-shortage-sparks-shake-up-analyst-says-memory-chips-are-commodities-that-can-easily-be-replaced https://www.tomshardware.com/pc-components/ram/hp-reportedly...
- gessha 5mo ago
  It might take a while but Chinese companies will figure out/steal/innovate into the right IP for different memory types and will cut out the American patents, ASML and East Asian fabs middle man. I can’t wait for times when I can afford chips from less than 8 years ago.
kingstnap 5mo ago
The only thing that can actually introduce competition in RAM is some form of government backing around national security concerns. China has been doing this for some time though so there will probably be major Chinese supply coming in the medium term.
laughing_man 5mo ago
The problem is every twenty years or so DRAM makers get burned by building for demand that mostly disappears overnight. They've been through it enough times that they're going to be really reluctant to build new fabs. They'll certainly put some effort into getting the absolute most out of their existing installations, but I would be surprised if you see a lot of new fabs until they decide the demand is durable.
ceejayoz 5mo ago
If we assume a spherical cow!
Danox 5mo ago
It will the Chinese, this will be the last big payday for the three company cartel and in time I think Apple will move in-house and design around.

colechristensen 5mo ago

No, it's the time, effort, and capital necessary to build cutting edge semiconductor fabs. Measured in tens of billions of dollars and decades.