Comment by ksec

Comment by ksec 12 hours ago

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I am so glad both top rated and majority of comments on HN finally understands DRAM industry instead of constant DRAM is a cartel that is why things are expensive.

Also worth mentioning DRAM and NAND's profit from Samsung is what keep the Samsung Foundry fighting TSMC. Especially for those who thinks TSMC is somehow a monopoly.

Another things to point out which is not mentioned yet, China is working on both DRAM and NAND. Both LPDDR5 and Stacked NAND are already in production and waiting for yield and scale. Higher Price will finally be perfect timing for them to join the commodity DRAM and NAND race. Good for consumer I suppose, not so good for a lot of other things which I wont go into.

ls612 10 hours ago

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

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  • ksec 35 minutes 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.

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  • kbolino 7 hours 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.

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    • vee-kay 6 hours 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://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

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      • artimaeis 6 hours 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

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    • Y_Y 7 hours 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)

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  • hollerith 9 hours 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.

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    • lazide 9 hours 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?

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