Average DRAM price in USD over last 18 months

If the demand holds I’m sure they’ll expand. Until then, I think they see it as a short term supply spike.

They would want to expand capacity if they believed this increase in demand is long lasting - the implication is therefore that they don't believe it, or not enough to risk major capital expenditures.

You saw the same with GPU makers not wanting to expand capacity during the Cryptocurrency boom. They don't want to be left holding the bag when the bubble pops.

Honestly having problems remembering the other AI companies without googling it. I recall MS, Facebook, Amazon, Google, and Anthropic.

Hopefully the Chinese manufacturers ram(p) up rapidly and spike Hynix and Samsung with heavily undercut prices.

Exactly. This is why they’re not scrambling to invest in additional capacity. If these memory manufacturers went all in on new capacity it would take years to build out. If the bubble bursts, or even if it doesn’t burst and just tapers off back to normal demand, they would be in a bad position with excess manufacturing capacity that isn’t paying off.

So demand from other sources has to be suppressed through being priced out in order to meet those supply promises made to OAI in ignorance of their true scale.

This is OAI doing suppliers dirty by making economy distorting moves without transparency, intentionally distorting the market in an effort to hurt competitors.

Yet another example of the “free market” creating destruction for the general public.

As a thought experiment, replace “dram” with “rice” or another essential food stock. Market manipulation such as this is wildly irresponsible, anti-humanity and antithetical to public good. Wars are started over less.

This is an excellent example of the actual alignment of OpenAI as an organization. Yet we are to trust them with leading the way in the alignment of our manque oracles of truth and power?

And then there are other factors like more sticks of ram stressing things further. I had to downclock to get memtest stable when running 4 sticks even though each kit ran fine on it's own. But that is expected as well as 4 sticks stresses the memory controller even further.

I confess I don't have any real recent experience with DDR5 though, mostly with DDR4 on Ryzen 1000-5000 series.

How do you know?

OpenAI is creating more demand, therefore the price must go up, if it didn't then there'd be shortages.

by trading them with longevity challenges.

Even though 2 decades have past after the "usual suspect" lead-free solder, gpu or vram chips needing a reball is still a common occurrence from a cursory look at YouTube channels of professional electronics repairmen.

i agree. Valve's money machine is with the steam platform, rather than any hardware sales - breaking even on hardware is sufficient imho.

Valve's existential threat is from microsoft closing off windows somehow (or extracting rent...like a store!). Therefore, pushing steam machines which can be run without windows, is both business expansion as well as an insurance policy.

Retailers raising prices in reaction to an incoming event that will take supply away from everyone is not that.

In reality, it is almost never a true binary of "afford" or "cannot afford" like critics of surge pricing make it out to be; people evaluate the price according to their circumstance and make a trade off. It is because of these decisions, the state of demand, that surge pricing is possible, not because of the machinations of evil price scalpers. That is why manufacturers couldn't lower prices even if they wanted to; gpu msrp being a great example of gpu vendors being caught between consumer ignorance about economics and the facts of reality that gpus are scarce enough to warrant higher prices.

It would have been better if people did raise prices during the pandemic for those things to prevent hoarding so I could actually wipe my ass at 2 cents a wipe instead of 1. But alas, the “price gouging” cry babies would have come out and lambasted them for “being greedy”.

Nope, governments were famously bad at this. Coffee rations and gas rations were a disaster.

(Edit: Replying here because of dumb rate limits)

>You guys are being unreasonable, we have plenty of toilet paper for everyone. Each person gets two rolls per week unless you can prove you need more until you calm the fuck down

And this is why it’s dumb. There actually was a supply shortage. You should read about it.

Toilet paper manufacturers made industrial scale toilet paper for offices, schools, public buildings, rest areas, etc.

1/3 of the entire toilet paper market for giant single ply rolls sold in bulk disappeared overnight. And that same demand flowed back into home multi-ply toilet paper that couldn’t be scaled up quickly because it came from a different mill.

Rations would have been completely stupid in reaction to a legitimate 50% increase in legitimate demand.

This is called a price ceiling, and it's a bad idea with a track record of failure and significant harm.

I'd rather pay extra and get what I need with 100% chance than get what I need cheaply with 5% chance and otherwise be forced to go without or buy from scalpers for the same price I would have paid anyways. This is the purpose of prices. So the people who really need it can buy it, and those who are borderline about the purchase decide to opt out.

If you're concerned with wealth inequality or one large buyer cornering the market, there are better ways to address those problem than prices ceilings.

The word for "monitoring market trends, anticipating needs and acting quickly" is, well, speculation. Why should a retailer not be allowed to speculate and hold more product stock when they anticipate a future crunch? In fact, the whole reason prices have become so volatile right now is that this supply crunch was not properly anticipated.

The reason why retailers are not "price fixing" is that price fixing involves setting an artificial ceiling on total production; retailers are not in a position to do this, and there is no evidence at all that DRAM makers are doing this either.

First come first serve must means enterprising individuals would buy as much as they could afford and then immediately relist it on Facebook Marketplace for the actual market rate.

Thinking that retailers could keep RAM prices low and also keep it in stock for you is irrational.

>I'd rather reward diligence and personal responsibility - if you monitor market trends, anticipate needs, and act quickly, such as buying RAM ahead of a known upcoming supply crunch, you're rewarded with access at the original price. Rather than passive reliance on wealth to solve problems. First come first served values effort and foresight. Scarcity is managed through time and effort rather than money.

Are you really going to discount the effort made by the manufacturers to produce the product? You know, giving them money is the best way for them to produce more products. A lucrative DRAM market will also make it easier for new competitors to enter the market.

Also, if everyone does what you suggest, then all that will happen is that the price will rise extremely rapidly before the actual supply crunch even happened. That sounds like what is currently happening.

Just ignore the downside part of the house analogy because it doesn’t apply to this current DRAM situation where prices went up.

The key point is that if you buy something and its value goes up, you’re not going to offer it for sale at the same price you paid for it. You’re going to sell it at market rate.

Everyone does this, including retailers. It elicits angry cries of “gouging” from people who want to believe retailers are the cause of the high prices and be angry at them, but the market is big. It’s supply and demand.

If a company in A sells a widget W to both the EU and the USA, such that a consumer in the EU and the USA pay the same prices even though the USA has a tariff and Europe doesn't, then the company will make a lot more profit per unit selling all their W in the EU and none in the USA.

I'm not at all sure what's happening at any given moment with the USA's tariffs on anything, given the chaos over there. But let's say W is the set of all things relevant to AI data centres. What this means is that all the data centres are now much cheaper to build in Europe rather than in the USA. Data centres can be put just about anywhere, given they're used over the internet anyway. This means that the companies selling W would have all the demand they want for W in the EU, so they could sell all of their supply of W in the EU, so they could get a higher profit margin on all of it.

I'm not sure how much DC investment money is going to which parts of the world, but I am sure that if all the suppliers stopped shipping to the USA because they could sell as much as they could make everywhere else in the world for more profit (and the same purchaser price after tariffs), I would have heard about it.

... because tariffs are paid for by the buyer?

Importing memory from Korea to the US means the importer had to pay a tariff. Importing memory from Korea to Europe means the importer does not have to pay a tariff. The company selling the memory gets exactly the same amount of money in either case.

I was just about to edit my response to the GP to say the same thing. Let's explore this hypothetical situation a bit further.

Suppose there was a DRAM manufacturer named "Acme DRAM" which decided to have a separate pricing schedule for the EU reflecting the lack of insane US tariffs.

Some enterprising entrepreneur in the EU would establish a company in the country having the least US tariffs and resell Acme DRAM to US companies. Surely this would make money hand-over-fist.

Problem is, the US DoJ does not look kindly on this kind of enterprise:

  DOJ also has demonstrated a growing willingness to pursue 
  criminal charges against companies and individuals involved 
  in customs fraud schemes such as the purposeful 
  misclassification of goods, falsifying country-of-origin 
  declarations, and intentionally shipping goods through 
  low-tariff countries. Importers of goods into the U.S. 
  should expect criminal enforcement to accelerate in the 
  coming months and years.[0]

All of this risk in the pursuit of lower profit margins by definition.

0 - https://natlawreview.com/article/what-every-multinational-co...