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Corn is heavily subsidized,also has (in the US) federally prvided insurance programs against plunging prices, has paid uselessness(ethanol). Despite all of thi
by DannyBee 2mo ago
Corn is heavily subsidized,also has (in the US) federally prvided insurance programs against plunging prices, has paid uselessness(ethanol). Despite all of this corn has caused massive agriculture bankruptcy/takeover when it has failed anyway.
So it's more "what's special about corn". It is also fairly hilarious to claim the parent is denying basic economics and then bring up corn as an example of having successfully managed economics. If the scales were not being thumbed, and "basic economics" were in play, corn would be in very very bad shape.
In the case of DRAM, there is an incredibly long history of these gloom/glut cycles, and they have stayed roughly the same timeframes (~3 years) since the 1990's.
Almost all the ones who have survived this long are either in the same kind of boat as corn - protected in various forms from the downside - or don't increase production and get caught out until they are absoultely forced.
The very temporarily increased profit is not worth going bankrupt for - they make more money long term by being very cautious and know this.
There are a near infinite number of economic studies you could look at (and several sibling comments cite some) - DRAM manufactuers don't chase the price and probably couldn't anymore if they want to.
None of this denies basic economic theory, of course, since economic theory is not exactly "rigorous", even to the degree it could be (IE even the parts that are pure analysis of data rarely reproduce!).
- SR2Z 2mo agoI don't think that anything you said is wrong but I also don't think that memory consumption is going back to the old baseline... well, ever. Memory is just too useful now that you can use it to drive cars and write code.
- nemothekid 2mo agoThe problem is that is speculation and the market barriers are currently too high for losing business to be a threat. The two outcomes are (1) you overbuild, you end being wrong, you go bankrupt and lose everything or (2) you are right, but since you didn't overbuild, you lost out on some revenue, but demand still exists 3 years later and you didn't lose everything. In any other business choosing (2) would mean someone else swoops in and steals all your business. It doesn't look like this is at all possible for memory fabs.
- leoc 2mo agoWell, the Chinese manufacturers are certainly coming, though CXMT seems to be being careful not to rock the boat, at least yet https://www.tomshardware.com/pc-components/dram/chinese-cxmt-dram-doesnt-look-like-the-budget-savior-many-were-expecting-new-modules-enter-the-market-but-prices-still-track-the-big-three https://www.tomshardware.com/pc-components/dram/chinese-cxmt... .
- thelastgallon 2mo agoIt makes sense, CXMT takes as much profit as possible, then use that money to build more capacity, ultimately becoming one of the biggest competitor (only?) to the cartel.
- crote 2mo agoAs of Q1 2026: 90% market share for the Big Three, 8% CXMT, 2% everyone else. And CXMT was only 3% Q1 2025.
- DannyBee 2mo ago"In any other business choosing (2) would mean someone else swoops in and steals all your business. It doesn't look like this is at all possible for memory fabs." FWIW - Lots of people seem to believe the "in any other business", but it turns out there are tons and tons of places it is equally untrue, even where there is near zero time or cost barrier to entry.
- crote 2mo agoPeople are happy to play with AI when the tech companies are burning hundreds of billions of dollars to subsidize it. It remains to be seen who is actually willing to pay for it at the prices required to recoup those insane investments. Which directly leads to the next big development: all the big players are investing in silicon with "baked-in" models, like [0,1]. Turns out you don't need an expensive general-purpose GPU with heaps of RAM to contain a model when you can make a custom ASIC around one specific model! Why spend a fortune on DRAM / HBM when all you need is some finetuning parameters which are easily stored in on-die SRAM? [0]: https://www.theregister.com/systems/2026/08/06/amd-acquires-ai-chip-startup-taalas-to-boost-inference-performance-by-etching-models-into-silicon/5284344 https://www.theregister.com/systems/2026/08/06/amd-acquires-... [1]: https://thenextweb.com/news/google-frozen-chip-gemini-silicon https://thenextweb.com/news/google-frozen-chip-gemini-silico...
- re-thc 2mo ago> It remains to be seen who is actually willing to pay for it at the prices required to recoup those insane investments. Everyone. Open models are going to keep prices down. A lot of current models are more than usable. Self-hosting would have been an option if hardware prices get back to sane values. The insane investments have to do with insane over-valuations, VCs involved and hence media spam on it. Chinese labs for example make do with 1% of the valuation and 1% of the resources.
- pmontra 2mo agoPrices must raise a lot to make self hosting mainstream or at least fairly popular. Yesterday a coworker posted on a customer's Slack the specs of a box he is planning to buy to run local models. It's about 5k Euro. I am paying 18 Euro per month for Claude Pro and I'm going through a migration (almost a total rewrite) of a web app from Vue 2 / Vuetify 2 / Vuex to Vue 3 / Vuetify 4 / Pinia. I never hit the 6 hours limit. I could consider running an equivalent model on a 500 Euro machine (about 2 years of Claude Pro) but 5k is 20 years and that box will be obsolete or will have failed beyond repair (no spares) much earlier than that.
- 1718627440 2mo ago> Memory is just too useful now that you can use it to drive cars and write code. You can use the state of the art from 20 years ago for that.