This is a most excellent place for technology news and articles.
Episode 7893 of corporations artificially creating problems to make profit by selling the solution. Just to then fail at solving the problem of their own creation.
Brilliant economic system. You can marvel at its ingenuity and just get lost in it.
They aren’t artificially creating this problem, they are inadvertently creating this problem.
AI companies need RAM and other compute components to feed the AI beast which drives up demand, and cost but reduces supply for everyone, including their Xbox and Surface divisions.
Given their enterprise divisions make vastly more money than their consumer divisions, nothing will change.
The problem is artificial, because 95% of all this 'AI' is useless, pointless, and a massive waste of resources. Nobody asked for it, and practically nobody is using it.
Even in cases where a chatbot is helpful, a small, local model is more than enough. Not a single soul needs a 50T parameter model for anything. Nobody on the planet uses AI image enhancement or item removal.
Almost all of this shit is purely made to inflate the bubble, and serves no other purpose. All the while ruining many other industries, people's hobbies, ease of finding factual information online, etc.
The problem is artificial, because it was created pretty much deliberately, for no particular reason other than profit.
Reminds me of that time Samsung wouldn't sell ram to Samsung because they needed to compete with the demand from Samsung.
Wait, what? #OutOfTheLoop
The semiconductor/memory chip production side wouldn't sell the chips to the consumer electronics side, because it's more profitable to sell and feed to the genAI side of the business.
Samsung is a Korean jaebeol. It's a massive conglomerate all owned by the one family, but each department operates very independently and is incentivised largely to maximise its own profit independent of the rest of the conglomerate.
Fuck Microsoft with an umbrella, but in this case it's not just only Microsoft, there are a lot more and bigger players on this shit dish
They could start manufacturing ram? Or fund startups trying to make ram?
Seriously is there no way to get out of having only 2-3 chip and memory makers?
You cant just "fund a startup trying to make ram". Chip fabrication is probably the most difficult and capital intensive production process there is. What manufacturing more ram looks like is investing tens of billions of real money (not the you give us stock we let you use our GPU deals the AI companies have been doing) and then waiting 5-10 years before the fab you funded starts to make chips, and hope prices are still high by then.
That's why the existing manufactures are slow to scale up, they arent sure that the current spike in demand will still be there by the time their scaling up increases production.
If only there was something like a chip act that the government could have provided that capital….
Yes, but also cartel behavior. Those same 3 manufacturers have been found guilty of it in the past, and it wouldn't surprise me one bit if they were fixing prices again now. See this video by Gamers Nexus.
Of all companies, though, Microsoft is one of the few who could easily afford to sink a few billion into starting in-house chip production.
And even if they only ever produce chips for their own products, they'll still probably come out ahead in the long run, because of all the money they'll save on not paying inflated prices for others' chips to use in Microsoft hardware.
That 'in the long run' part is the problem, though. Corps can never see beyond the next quarterly earnings report. An investment that will take years to pay off ... that's just out of the question.
Honestly, no. There is no fast way to spin up fabs for this stuff. A lot of lithography equipment for the top tier stuff is made by 1 supplier, stocking a shitload of fabs with the right gear just isn’t something they can do.
IMHO, the fastest way out of this mess would be for governments to regulate how supply is spilt between consumer and enterprise products.
A lot of lithography equipment for the top tier stuff is made by 1 supplier
So maybe invest in that and become another top-tier supplier of lithography equipment?
Or just build hardware that's easier to make
I would gladly go back to 2012-era hardware if it meant I could afford it and people maintained software for it
But you can!
Just buy up used stuff, computers nowadays are very resilient.
I have a 6 gen intel Linux, works like a charm., and a 8 gen for "gaming n stuff" (windoze), I even got my hands on a recent laptop for 100€...
No need to buy that latest stuff, IMO.
That still might take 10y because lithography printers aren’t cheap, their location isn’t cheap, and so much more. Once you watch an Intel, TSMC, or Texas Instru… chip factory tour.
Wait, why doesn’t Texas Instrument cash in or did they offshore their production too?
Fun fact...the chip maker and the calculator company are completely seperate. Don't really know why it's fun but well it is a fact.
They're going to start up an entire RAM company to fill a temporary shortage?
Yes, then they'll be shortage resistant
It can't really work the way to want it to.
You have let's say Samsung who can make money selling a chip as long as the price > $50. And historically the price of the chip has averaged $100.
But the demand is crazy and they can't keep up and the price of the chip is $500. They are making money hand over fist but let's say they feel a moral obligation (hahahahaha) to lower the price by increasing capacity.
So they invest a billion dollars to increase capacity. Now that's a huge cost that reduces their margin on all chips. Between loans and maintenance, now they have to sell a chip for $90 to break even. But that's fine because they are making $410 per chip instead of $50!
Except now you fix the supply issue and demand falls to normal. You've just cut your profit from $50 to $10. You have to sell 5x the volume to make the money you were making!
Except it's even worse, because now you have all these extra chips you're building and nowhere to put them. Supply exceeds demand, pushing prices lower so instead of $100, they are selling for $80. Now Samsung loses $10 on every chip and they go bankrupt trying to pay back a billion in loans.
So it's not really in their interest to build capacity to meet a temporary demand. Unfortunately.
Honestly, we should probably just have a state owned and ran chip fab company. If the US is serious about security and/or innovation, that's what needs to happen. There's no way it's going to happen though sadly, but that's what should be done. >
Why state owned, when they can have privately owned and just funnel your tax money right into it, then retire to take up cushy "consultancy" positions on the board?
Poor Microslop
I went to my thoughts store and they were all out of thoughts. The prayer store? Out of business.
My fucks to give? Gave the fuck up and left.
If there was a decent governement behind they would have never left this reaching the point where the consumer market is left with nothing
Idk, maybe stop??
"We're going to crash in to that orphanage! AHHH!"
"Then brake..."
"OH THE HUMANITY!?!"
Asha Sharma standing on the glass cliff.
She and Xbox will be gone inside of two years.
I haven’t bought an XBox since the 360 because it was such a vapid upgrade path.
Asha was absolutely put in place to be glass cliffed.
Not sure Xbox will be gone any time soon, but once Asha has taken all the blame they'll get back to the same old BS.
They're still planning on making a new Xbox? Sometimes I forget there's an Xbox console anymore.
...640k ought to be enough for anybody...
They could just cancel all yet to be manufactured orders for starters...
I'm all for shitting on Microslop, but let's not pretend they're solely responsible for the memory pricing crisis.
let’s not pretend they’re solely responsible for the memory pricing crisis.
Nobody is claiming that. Did you even read the literal first sentence of the article?
the memory pricing crisis that its own AI ambitions are helping cause
The headline is claiming that. You can't just lie and then walk it back once someone clicks. There is a limit to how much inaccuracy you can put into a headline to simplify it, and this is definitely past it. To save one word they make it this wrong.
Soley? No. Huge part of it? Absolutely.
I wonder if we’re going to see a console generation with expandable memory for the first time since the N64.
Would make some sense if the current climate persists for a few more years. Sell variants with multiple ram configs at different price points, and when ram prices come down you can wack a ram stick/module in there.
Obvious problems: consoles usually use unified memory, which probably won’t really work with expandable storage, so would need a different architecture. Also, if they use non-standard dimms, it’s unlikely the manufacturers would drop prices of those modules anywhere close to the actual amount of theoretical ram price drops. And this would require cooperation with game developers to make games that work with different ram configs, and give a tangible benefit for having more ram, without breaking compatibility for the base model units.
You think RAM prices are ever going to drop?
Sweet, summer child..
Yeah, I do. For two reasons.
Buildout will start to slow down when the speculative investment slows down. Which is going to happen. None of the big ai companies are actually making money yet, and even if they were, eventually growth will start to level off. Investors are always looking for the next big thing, so once AI isn’t the shiny new thing, the magic investor money will start to dry up.
Even if demand continues as it is, more memory will be manufactured. China is already producing memory, and I’m expecting them to scale fast. Also other countries and regions are realizing how important tech independence is, so I expect we’ll see more fabs pop up at least in the EU and US. One of the big reasons we’re in this mess is that the Korean fabs have been hesitant to expand production because even they don’t expect this to last.
