So the availability of cheap phones is going down because of the cost of RAM.
What about the RAM consumption trend of the last 10 years? I think it is very feasible to produce phones with the same amount of RAM as was the norm 10 years ago. The only compromise would be using older algorithms and features that consume less of it, and to take a bit of effort on keeping an eye on memory consumption in the development phase. There's a lot of opportunity. We can even leverage AI these days to optimize existing software for RAM usage.
What was most surprising about all this to me was this line:
> So modern DRAM manufacturing is an extraordinarily complex and expensive process. Building a single state-of-the-art DRAM fabrication facility, a “fab,” will cost you about $15 to $20 billion; acquiring all the necessary equipment, like lithography tools and etching machines, will cost you another few billion; and then it’ll take you a few years of producing substandard and defective memory chips before your yields start to look competitive.
Extraordinarily complex and expensive! And yet I look at all the money being shuffled around between Nvidia and Google and Microsoft and Amazon and Apple and can't help but think that this is a tiny amount in comparison to what they're moving around on the stock market buying shares in each other.
Apple in particular has $20B in its couch cushions and is very vertically integrated and hardware-focused. Apple silicon is currently made by TSMC, but it seems they'd be a prime candidate to spin up their own memory fab.
I suppose the biggest problem to current executives at each company is the "few years" until that investment yields results, in the short term it's better to pay through the nose and buy GPUs with HBM at any price.
> it seems they'd be a prime candidate to spin up their own memory fab.
While Apple et al certainly have the money to tilt up their own fab, they're savvy enough to understand the memory market's long history of constant boom/bust cycles. I still remember the huge DRAM shortage in late 80s forcing my startup at the time to delay launching our new product for a year.
People assume Apple cares about vertically integrating cost but they're actually focused on integrating margin. Apple has billions in cash on hand and when they think about what to do with it, a key metric is Return on Capital, especially the margin that capital will generate. Since a core metric public companies are judged on is blended margin, they are looking for ways their bags o' cash can be put to work generating revenue at margins that will pull their current average margin up vs down.
Averaged over time, mainstream memory devices are historically one of the worst margin areas of the semi market. It's super expensive to tilt up a fab on a new node but once you do, turning the crank faster to make a lot more chips isn't too hard because mainstream DRAM tends to be quite uniform. So when a fab on a new node and/or RAM generation first opens, the margins tend to be pretty great. But as the node matures and/or the RAM generation goes from 'new' to 'commodity', competition heats up as everyone gets better at making more faster. Then they're tempted to maximize revenue by cutting prices until their mature fab is at 101% utilization. And that eventually drives margins down until someone's selling near cost to sustain their low-price-enabling volume - with occasional dips below cost when they get stuck holding excess inventory. That's why cash-rich companies with high margins like Apple are delighted to buy DRAM built with Other People's Money. As long as the DRAM market is under competitive pressure, Apple gets to shop their huge orders around to get the absolute lowest price on RAM that was built with other investor's low margin dollars.
And what happens if the market settles back down or the leading memory tech pivots away from what you invested all this capital and time chasing?
You'd need a very strong, very particular forecast to make such a costly bet. And conversely, it may say something about their internal forecasts that they're not making the bet.
That’s an entirely different framework, one that doesn’t concern investment decisions of Apple or Google.
I do agree that USA and EU could foot the bill and subsidize a couple billions in such industrial infrastructure, perhaps taking back a cut of the profit rather than privatizing all of it.
But they’re not doing it, or are making pitiful efforts at that
Meta spent more on the Metaverse, it’s all the most certainly something they can afford to take a hit on and they won’t because memory and CPU usage is only going to go up from this point on.
Why should society care about people making profits? Society would greatly benefit from cheap abundant ram than FAANG shares going up. I'm kinda sick about only caring that some billionaire makes more money and would rather you know... actually improve conditions to better society.
This is why China is eating the West. Quite easy to start an electronics company when you have such an abundance of suppliers, compare this to America where there is maybe one or two players in the entire nation.
Quite pathetic, but we live in a pathetic world so it tracks.
No, nothing to do with that. Even Steve Jobs said so back 20+ years ago, about why Apple can't just get out of China manufacturing.
He said the labour cost is neghigible and not qualitatively different to the US. It's the availability of every part and tech you need in nearby supply centers and factories, the huge supply of appropriate resources, including the ability to have tens of thousands of expert workers on command for a fast new production run.
Labor has very little to do with it and more about a political class that has to increase the material needs of a nation if they still want to stay in power.
What has the US government done for American's lately outside of forcing people to buy healthcare and providing monetary support for families for a small window during covid? All we have is a political class that wants to fuck Americans raw until they pump every cent out of us.
Also the US has one of the most weakened labor classes in the world, come the fuck on. Corporations convinced our governments to sell out labor at every opportunity. You're acting as if it was the 1930s where there was a national strike every month until the Wagner Act.
We're also eagerly taking advantage of their cheap labour and we're taking advantage of plenty of people here at home, sometimes to the point of literal slavery (it's okay when they're prisoners or immigrants)
While these private companies exist and are in it for the profits, they don't control the government, meaning any potential price gouging is strictly regulated. The Chinese government actively prevents private companies from becoming too powerful or dominating an industry in the public eye. Instead, they foster competition by promoting and building up alternative companies.
A great example of this is how they handled digital payments. While Visa and Mastercard maintain a monopoly in the West, China faced a similar situation when private mobile payment systems began dominating the market. In response, the government stepped in and forced the ecosystem to open up to competitors.
I wouldn't characterize it as forcing to "open up". It's true they put an end to some of the most egregious anti-competitive practices, but the Chinese tech ecosyatem, including payments, is still notoriously non-interoperable. For example, there's no way to transfer money between WeChat Pay and Alipay.
The relationship between Tencent/Bytedance/Alibaba is what happens when there are no monopoly laws or they are ineffective: every company fighting tooth and nail to corner every market with a single "super-app". No specialization at all and many races to the bottom, like the recent war between Alibaba, JD and Meituan over instant delivery that made every company involved lose a lot of money.
My understanding is that the Chinese government prefers to have multiple successful companies in each field and they don't like it when one company becomes too powerful.
They pivoted away from that quite a while ago now they just disappear people for a week or two and randomly completely crush a business here and there to make sure they understand their place.
I own FAANG stock because I own the S&P 500 in my retirement accounts, and so do managed pension funds. There's a lot more than billionaires who benefit from FAANG shares going up in value.
I agree, the sentiment that billionaires are the only beneficiaries of share value increases is misinformed, but the mentality of profit chasing is a long term security risk not just to the nation, but to the continued rise in value of said shares. Once China has enough of a grip on their domestic attempts at semiconductor fabrication, these company's supply chains will be completely compromised, allowing China to practically swap out any of these FAANG companies for Chinese counterparts over time. As long as the US, UK, EU and FAANG continue to do next to nothing to develop domestic chip fabs and supply chains, it is only a matter of time.
Society should care about people making profits because otherwise those people do something else instead of providing goods and services. What happened in Communism is instructive on this point. Now if you want to argue that the pursuit of maximum profit as an end is a problem, there's a case to be made. The US had something like a marginal tax rate of 90% around the 1940s/1950s, if I recall correctly, and it obviously didn't hurt innovation, but people got paid in perks and corner offices and status instead of just money.
I think people are misled by Marx and derivatives, and misdiagnose the problem. I don't think people are upset by the CEO making lots of money as much as they are by the HBS management style of using people as a tool, or even as interchangeable "resources". However, the philosophical materialism of Marx & Co. pretty much makes this inevitable. (The secular view is also materialism, so you get it on both sides.)
Call me crazy but society should care about giving people meaning, providing healthcare, and an education. You know the three things that lead to productive humans.
Notice in my comment I mention nothing about taxes? Maybe people are mislead about neoliberalism? All it has done was sell out American jobs, get civilians addicted to drugs, and manufactured a political class that cares about donations over material needs.
This is an economic system that isn't even 50 years old and you're already going with the Marx scare quotes as if US branded capitalism hasn't already killed 10s of millions of Americans in the pursuit of profit.
Let's not even peel back the founding of this nation, a colonial white slaver state with minority protections baked into the constitution to impede people's chances of progress with every life.
Part of this is a lie high prices for equipment has a lot to do with monopolies in the whole supply chain and one of the major reason I am rooting for China to get parity on node as that would mean it would have been able to break all the monopolies and we get competition on the whole production from uv machines, wafer, on equipment for storing etc. Renewables are rapidly taking the world to very cheap or free energy but it would be bad if the way to best use the energy for production is controlled by a few corporations
While I think Apple is a prime candidate to do something like this financially, I’ve never had the impression that they ever want to get involved in something “just” for vertical efficiency. There’s always a long-term vision where they can leverage it to gain a competitive edge that their competitors can’t match (the PA Semi acquisition being a perfect example of this).
RAM doesn’t seem like something where simply owning the manufacturing could lead to a disproportionate competitive edge. It would just be a vertical efficiency gamble that may or may not pay off. Of course that could simply be a failure of my imagination.
Well, they acquired PA Semi in 2008, they used their first chip (the A4) in the iPad in 2010, and they progressively iterated using the chip in phones until they announced the switch from Intel in 2020 (concurrently, more or less, with the A14). So it took them 12 years and 10 different chips.
Apple, Google Microsoft Amazon should all set up memory and CPU fabs. I don’t understand why they don’t do it. $400 million ASML machine is chump change and you can almost certainly find/train locals or provide incentives to immigrants to come here as workers to fill the roles there.
Well, isn’t Musk doing something similar with his new solar panels fab?
Frankly it’s ridiculous how we (the West) dropped renewables like a hot potato because it became synonymous with subsidizing China’s dominance in the field.
The US right now is more harsh to live in than the US pre-Reagan, which was more harsh than many countries with a strong welfare state, but all of them are capitalistic.
China going capitalist ( while remaining authoritarian ) has helped lift 800 million out of desperate poverty.
I hope that India too can emulate this in my lifetime.
I was born in Kerala and would love to see Indians live in a country that is as wealthy per capita ( PPP adjusted ) as Singapore or failing that even as wealthy as the USA.
Capitalism has it's problems.
But you struggling with rent is entirely your self-inflicted problem...
So why aren't those people lining up to try and emigrate to non-capitalistic countries for a allegedly better life?
Instead for the past century we have almost everyone in the world wanting or not minding moving to the hypercapitalist USA.
Ironically almost all the countries with emigration controls and exit visas in the past century were noncapitalistic countries trying to stop their people from fleeing to capitalistic countries.
I don't know what you would define as "non-capitalistic" or why you'd limit your options to only those countries, but the idea that people can just pack up and go to live wherever they feel like is incredibly naive.
The reasons Americans don't just move to whatever country they think they'd enjoying living in the most are often the same reasons most people all over the world don't. They have a life here. Family, friends, jobs and other ties to their community that would be hard to leave behind.
Uncertainty and fear also keep people from moving their lives to new countries. Especially when they're going to a place where they don't have friends and family to help them with things like expenses and childcare.
Americans in particular are unlikely to speak anything other than English and while English is often understood to some extent many places overseas it can't be assumed to be avilable everywhere. Understanding the local language is often a requirement for getting citizenship in a country and not being fluent will be a hindrance even where it isn't explicitly required.
It's also very expensive to move. You'll need to have enough money to live somewhere and feed and clothe yourself the moment you step off the plane. You'll need to store all off your things someplace until housing can be secured and that can take a lot of time. Countries can require thousands in fees to apply for citizenship and people struggling with basics like food and housing aren't going to be able to afford that. About half the country doesn't even have a passport and the expense of getting one (along with the needed documentation) would be an additional burden.
Other countries don't necessarily want you. Immigrating is difficult. Unless you can demonstrate that you've already got someone willing to hire you (and effectively vouch that you won't be a financial burden) or you have some much needed skill or one that a native citizen cannot perform you may not be welcome. No nation is obligated to accept responsibility for you just because you want to live there.
It'd be great if everyone everywhere could just pack up and leave to start a life wherever they felt like it, but there are many reasons why that just isn't realistic. There are tens of millions of people America right now living in places without safe drinking water because of heavy metal contamination. Why do you think they don't just pack up and move to cities with drinkable water? What about the tens of millions of Americans who live within one mile of toxic waste sites that have been linked to infant deaths, cancers, and other serious long-term health issues? Why don't they just move? Forget about America, how about all those starving Africans just move to somewhere with lots of food? The world just doesn't work that way.
Those factors apply to non Americans wanting to move to the US but it's apparent that there is heavy demand to the extent of millions taking dangerous trips and breaking laws just to get a foot into the USA. You cant find such latent demand to the same extent via surveys or visa applications in the other direction.
> But you struggling with rent is entirely your problem...
Who said anything about struggling with rent? Sounds like you a grasping for a straw man.
> I hope that India too can emulate this in my lifetime
I, too, hope the best things for the people of China and of India. But India, by any metric, is already a capitalist economy, where its wealth is concentrated in the hands of a very few.
To the extent that China has been successful is distributing its wealth among many people, I'd say it's the authoritarianism, rather than the capitalism, that has been instrumental. The state sets agendas, quotas, and salaries specifically to produce that outcome. Top-down government control is not a feature of unbridled capitalism.
So we have two large industrializing economies, both capitalist. One (the authoritarian one) has succeeded in drastically reducing poverty; the other has not. And yet you think that capitalism is the driver of equality?
Capitalism produces wealth. You need some other system to distribute that wealth fairly.
>It's up to individuals to take advantage of the opportunity, or not.
The problem is that after decades monopolies consolidated and you have massive offshoring of labor to cheap countries and offshoring of profits to tax havens, there's not much opportunities the working class individuals can take, as all the opportunities are now geared towards the asset owning rent seeking class.
I would be curious to see those stats that show they are no longer in poverty, as poverty is relative, aka when rent goes up many still can't afford it. Just because they have more money coming in, it doesn't mean they aren't poor. Wealth per capita in the UK, US, Germany, and so on is good but there is still rampant poverty in each where people struggle to afford food, housing, and utilities. The wages don't match the outgoings.
"while remaining authoritarian" implies that Authoritarianism is an exclusive trait of Communism, which is the most absurd thing I've ever heard. Use any Capitalist country with an Authoritarian leader as an example.
"In 1985, if you were a reasonably affluent American, the best computer that you could afford was the IBM PC AT. The PC AT would cost you about $6,000—$19,400 in 2026 dollars—and thus represented about a quarter of the median American’s annual income; and it ran on an Intel 80286 processor, capable of something like 900,000 instructions per second. Today, if you find yourself in a market stall in Nairobi or Lagos, you’ll be able to find a cheap smartphone—like the Tecno Spark Go, manufactured by China’s Transsion—for somewhere between $30 and $120. That phone will run on a processor capable of billions of calculations per second."
Please note that "commerce" and "capitalism" are not synonymous, and that the former does not imply the latter. Capitalism is in no way a prerequisite for technological development.
I mean we don't really have any counter examples even China didn't really start advancing in any meaningful way until they started moving towards capitalism.
> The reforms [starting in 1976] de-collectivized agriculture, abolished the people's communes, relaxed price controls, allowed foreign direct investment into China, and led to the creation of special economic zones, most prominently the Shenzhen Special Economic Zone and the Shanghai Pudong New Area. Private enterprises were allowed to grow, while many state-owned enterprises were scaled down or privatized. Shanghai Stock Exchange and the Shenzhen Stock Exchange were established in 1990, allowing a capital market system
> They only started making things once they realized capitalism was better.
Free commerce is not the same as capitalism. A country where production, wages, and ownership are decided centrally can hardly be said to be unfettered capitalism.
Please avoid straw man arguments. I didn't say that China didn't use capitalism: I said that it didn't use unfettered capitalism. Its capitalism is strongly tinged by its authoritarian rule with the explicit goal of reducing poverty.
The US, like China, continues to use a mixed approach to economic management in the form of regulated capitalism. The degree of regulation in the US has been declining since the 1950s, resulting in larger wealth inequalities and more poverty.
You don't have to demonstrate this kind of ignorance of human history on main.
Aren't you embarrassed? Do you value knowledge even a little bit?
When did capitalism begin? How was 'stuff' created and distributed prior to that? How do other, distinct and contemporaneous modes of production create 'stuff'?
Capitalism began when Thag, who was a good hunter, brought home two dinosaur steaks. His buddy Grog was a lousy hunter, but was good at making spears. Thag traded a dinosaur steak for a new spear.
Said the Christian in pre-Englightenment Europe: "Well, of course Christianity is the one true religion. After all, the whole civilized world is Christian."
That's because your question is silly. I'll spell it out for you: Just because all modern states are capitalist does not mean that all states must be capitalist, as evidenced by the many erstwhile states that were not capitalist. Your failure to see beyond your immediate surroundings and ignoring the first sentence of my previous comment is perhaps the reason for your silly question.
> Just because all modern states are capitalist does not mean that all states must be capitalist, as evidenced by the many erstwhile states that were not capitalist
However, I doubt anyone else would instead want to live in current day North Korea or pre-1990 eastern bloc countries, or in East vs West Germany.
So not a single country out of ~200, not one, emulated the alleged great successes and utopias of historic non-capitalist economies for a century plus. Which is why you're unable to name one in the 20th century. Hmm I wonder why.
Maybe we can look at societies where the modern era hasn't touched, like some places in Africa. Why is the quality of life so great there that everyone wants to move from hypercapitalistic societies like the US to Africa instead of the other way around?
Wow, talk about moving the goal posts. I was pointing out that capitalism has not always been the universal economic system, and now you're trying to make me explain why years of exploitative colonialism and corrupt authoritarianism haven't yielded a better alternative. Well, isn't it obvious?
300 hundred years ago, every country in the world was ruled by an absolute monarch, and that fact alone was considered persuasive explanation of divine will: the world must always be thus. Since then, the philosophy of rulers has changed, but small-minded apologists for the status quo have not evolved in their thinking. "If our current approach isn't the best option," say the small-minded apologists, "why isn't anyone doing anything different?" The answer to that question, in case it wasn't obvious, is the same as it was 300 years ago: entrenched interests.
Are you seriously arguing that it is impossible to allocate today's abundance of resources in a more fair and productive way than our current system does?
The problem is that your proposed approach has been tried again and again and has failed every single time with disastrous consequences for several generations.
Once people are given all the resources they want they are not motivated to work. The productive people get tired of the product of their hard work being forcibly taken away and stop working since they would be given resources anyway. That's how the system collapses since there aren't enough resources for everyone to sit and consume. Thats exactly what happened in the eastern bloc. https://www.chron.com/neighborhood/bayarea/news/article/When...
How many times should we run the same failed experiment and ruin millions more lives?
> Thanks to capitalism, I don't have to toil in the fields.
No, that's thanks to commerce not to capitalism. Capitalism benefits those those who hold capital, which is not me.
The fact that there are more than enough resources for no one to live in poverty should suggest to you that something is wrong with the distribution system.
"It's true, Mr/Ms Rationalist, that our patented Miracle Medical Snakeoil caused a third of your leg to become necrotic and fall off, but be glad for the two thirds that did not fall off!"
> > Thanks to capitalism, I don't have to toil in the fields.
> No, that's thanks to commerce not to capitalism. Capitalism benefits those those who hold capital, which is not me.
Are you toiling in the fields? It seems to me like your attitude is that "If I can't be rich, then no one should be rich."
> The fact that there are more than enough resources for no one to live in poverty should suggest to you that something is wrong with the distribution system.
So instead of two thirds of the world not living in poverty, everyone should live in poverty equally?
> It seems to me like your attitude is that "If I can't be rich, then no one should be rich."
The problem with capitalism is not that some people get rich and some people don't. The problem is that of an unfair playing field.
Everyone has a body and a mind, and commerce allows us to rent out those features in exchange for pay. People who are smarter or stronger or work harder or work more will be able to benefit more. That's how I got rich. But there's a limit to how rich I can get, because I have only one body and one mind and there are a finite number of hours in the day.
The other way to get rich is to own things. If you own a factory or real estate or bonds you get to charge other people and make a profit even though you are expending no effort. And in this case there is no limit on your profit, because you can use your profit to buy more capital and make more profit from that. The result is eventually a winner-take-all economy, where the winners own an increasing amount of society and everyone else pays them to use it. If that sounds familiar, it should, because it's feudelism, and is the eventual end state of capitalism.
You should really read a bit about the philosophy that you're arguing so vehemently for, apparently without knowing anything about it.
> So instead of two thirds of the world not living in poverty, everyone should live in poverty equally?
> You should really read a bit about the philosophy that you're arguing so vehemently for, apparently without knowing anything about it.
You had a good comment until you wrote that. Don't lower your standards with stupid personal attacks.
> The problem with capitalism is not that some people get rich and some people don't. The problem is that of an unfair playing field.
I would love for things to be fair, but I grew up in the real world and learned that things weren't fair back when I was a kid in primary school.
Instead of lamenting about something that I can't control, I decided to focus my efforts on what I can control. Instead of tearing other people down, I built myself up.
Unless you can change the human characteristic of greed, the world will always be unfair. You can spit into the wind, or you can set a sail.
> You had a good comment until you wrote that. Don't lower your standards with stupid personal attacks.
I apoligize for judging you based on the things that you write.
> Unless you can change the human characteristic of greed, the world will always be unfair.
There is nothing wrong with greed or unfairness, to a degree. As I said in my previous comment, some personal characteristics will naturally lead to inequality of outcome. That's fine, because everyone is deriving profit from the (variable quality) work that they are personally able to produce. I would say that greed and unfairness are essential to any system of commerce, which I support.
Capitalism, on the other hand, allows inequality on a grand scale that necessarily results in a society that no longer rewards hard work: the lords own all property, everyone else works for them, and there is no way to achieve wealth competitive with that of a lord simply by labor. The laborers work to surive, and the owner class consumes all the benefits. This is the system that we spent a century of war fighting to end. It seems silly to go back to feudalism just to appease the modern-day lords.
> Instead of tearing other people down, I built myself up.
Who, do you suppose, am I tearing down? I want a society that rewards hard work. A system with no social mobility is not that system. I want people to improve themselves in order to make more money. What I don't want is a society where the owner class are able to be parasites on everyone else, producing no labor (physically or intellectually) but showing giant profit. The modern day US is increasingly distant from its much more socially mobile past, and it's only going to get worse.
I'm not saying that the current crop of billionaires haven't worked hard to get where they are. I am saying that their work is not proportional to their benefit, and at a certain point they are able to continue benefitting despite producing noting of value.
> The other way to get rich is to own things. If you own a factory or real estate or bonds you get to charge other people and make a profit even though you are expending no effort. And in this case there is no limit on your profit, because you can use your profit to buy more capital and make more profit from that.
Risk : Reward, that's obvious, isn't it? I have known many relatives who bankrupted themselves trying to "own" stuff. I also know some who succeeded and are rich. Starting a business is very hard, try it.
The MacBook Pro on which I’m writing this piece needs memory that can keep up with a powerful processor running many programs at once: so it uses a standard called DDR, “double data rate,” which runs at a reasonably high voltage and offers high bandwidth. The processor on my iPhone is less powerful, so it needs less data at any given moment; but voltage matters enormously, since every milliwatt allocated to memory is drained from the battery. So smartphones use LPDDR, “low-power double data rate,” a variant of DDR engineered to operate at lower voltages.
The last MacBook Pro to use DDR was in 2019. All Apple Silicon Macs use LPDDR.
Apple has been using LPDDR in the MacBooks since at least 2015. I remember it was one of the complaint of the 2016-2017 MacBook Pros. They were still using LPDDR3 because LPDDR4 wasn't ready for production yet (despite regular DDR4 being available). The 2018 MacBook Pro's finally switched to LPDDR4.
Quite possible. He did say his “powerful” MacBook Pro CPU is faster than his iPhone.
I’m pretty sure even an iPhone 11 chip is more powerful than a 2019 MacBook Pro CPU in ST. An iPhone 15 is more powerful than the fastest 2019 MacBook Pro Intel CPU in MT.
I suppose he can be using a 2019 MacBook Pro or older and an iPhone 14 or older and compares only MT speeds.
The headline here under-serves the article in my opinion: this is a fascinating, deep explanation of how the memory market works and why increased demand for HBM (used by big GPU racks) hurts the availability of wafers for DDR and LPDDR (used by laptops and phones).
> these memory makers have learned a very particular lesson from the unforgiving history [deep drops in demand] of their industry: always leave demand unmet
I can't blame them for keeping some reserve demand ready so they keep having customers over the years.
I heard that one company buying all the product or a majority of the product is called a monopoly practice.
If a dominant buyer locks up most of the supply chain through exclusive contracts, it prevents rival companies from getting the materials they need to survive, which violates laws like Section 2 of the Sherman Antitrust Act.
Regulation is dead under this current US administration (unless you pay a bribe). It's so weird this is where we are right now and most of the tech leadership has to play along even though it's technically illegal?
It's impressive that somehow, as if by coincidence, we're seeing the biggest inflationary drivers for decades, perhaps for centuries, all happening simultaneously.
The Iran war is spiking the price of oil and will likely cause shortages of pretty much everything if it isn't ended.
The Ukraine war is helping with that by destroying Russian refining capacity.
The memory shortage is set to do the same to consumer electronics, which are absolutely essential to the modern economy.
Meanwhile the AI fad is seeing huge layoffs. At the same time as the AI Big Cos are beginning to show signs of ending the subsidised free lunch phase and moving to a utility model, which will raise prices for every company that is hooked on AI.
Also tariffs. Although I'm not sure if anyone knows what's happening there.
And farms are failing. Climate change will accelerate that, so there will be food shortages within a few years.
If it's not cynical and deliberate, it's an astounding confluence of (literally) catastrophic mismanagement.
This is really the only point I disagree with. Layoffs are being blamed on AI, but they are really a hangover of the covid hiring boom, and subsequent bust.
All the tech money is going into building data centres (and the gas turbines that power data centres), and it turns out that programmers don’t have the relevant skills to build gas turbines.
A few months ago I’d have been right there with you; however recently there have been a number of high profile multi-thousand-head layoffs attributed to budget pressure of deploying AI - and so technically it’s more of an indirect rather than “a robot stole my job” replacement, but still causal. Those tokens will be “doing” labor, rather than the human.
And building gas turbines (or even designing them) are probably not jobs that pay salaries developers got accustomed to, especially in Sillicon Valley, over the last 10-20 years.
Jobs at GE in Schenectady may not be what those developers are looking for even if they were qualified.
No, but it's a fun line for any automotive or other old-industry workers to throw at programmers, as they were the ones promised re-training in industries they would have to start from the bottom in.
There are a bunch of factors that are intertwining. And unfortunately, some specific demographics are mostly those being most caught in the crosshairs.
It would be a great scapegoat for further monetary expansion related inflation.
Step 1) Instigate price increases for temporary reasons, leading to noticeable price increases.
Step 2) As temporary reasons go away, increase money supply. Prices stay the same, you get to blame the causes from step (1) while not mentioning that the prices could have gone down when the problem went away, or blaming greedy companies for not lowering the prices.
We're losing a lot of workers. Some might consider that a good thing if they hate the idea of a large exploited underclass (or just people of a certain skin color), but it could be a problem for farms if there aren't enough hands to harvest in time.
Let us hope this results in farms offering Americans better wages for working on farms. Only 1% of the retail cost of produce is due to labour. Farms could double wages to workers and it would barely move the needle on inflation.
if they are large corporation owned farms as many small family owned farms are going to go bankrupt in the next 2 years because of the price of fertilizer and diesel and higher interest rate.
He destroys trade relations so the farmers can’t sell their produce, then bails them out by taking on more government debt so farmers can dump soybeans in a ditch.
> And farms are failing. Climate change will accelerate that, so there will be food shortages within a few years.
This is the key one to watch out for. Prior food-based conflicts have sparked revolutions and civil wars. People can tolerate not having electricity, people can tolerate not having internet, people can tolerate not having gas.
But a lack of food, due to a wheat shortage which in turn was sparked by Siberian wildfires destroying a whole year's wheat crop in Russia, precipitated the Arab Spring and the subsequent civil wars, as well as the ascendancy of ISIS.
The climate is changing in a positive direction for farming. Farming is easier now than ever before. There's literally no chance of food shortages. Unless, of course, there's another attempt at building socialism.
US tariffs are mostly dead. Ruled illegal and being refunded. Second attempt at tariffs has also been stopped. And inflation over the past 5 years is still milder than the late 70s and definitely milder than what has been seen in Turkey or Argentina or Zimbabwe.
Not to mention that some of the effects that OP cited are either deflationary (like layoffs and automation), or clearly cyclic (like the memory boom bust stages, experienced just a few years ago post COVID).
The point to short will be when the Chinese army forms up.
With Ukraine we saw it. It was incredibly obvious. Hilariously the Ukrainians themselves saw the huge army on their border and told everyone it wasn’t going to happen and refused to build any defences. Taiwan will be the same. But the satellites will give everyone enough warning.
> Hilariously the Ukrainians themselves saw the huge army on their border and told everyone it wasn’t going to happen and refused to build any defences.
In terms of gaining political support, being a victim in the modern world is very advantageous. The more of your civilians die unjustly, the more the media will portray you as a great and brave leader. There is nothing hilarious about this, only cynicism of the leaders of the country.
This is the biggest memory repricing cycle I've ever seen in my life; some degree of high price/limited availability and "free RAM with purchase of Doritos" cycle is always expected, but this has been the worst one yet.
As other commenters have pointed out but I might have missed in the article, compute maturation is amplifying memory constraints right now and making it worse. Device upgrade cycles are getting longer because most compute-based products have matured, with CPUs not seeing substantial gains and memory usage really only expanding at the absolute top end of workloads pre-LLMs (3D and HPC in particular). An iPhone 14 still has almost all the features of the iPhone 17, because the compute capabilities are remarkably similar; Geekbench shows a performance delta of ~25-30% between the 14 and 17 Pro Max models, which is pretty paltry considering the devices are separated by four years of manufacturing improvements. This extends into desktops, laptops, tablets, STBs, and more, with only VR devices and larger ARM/RISC-based kit seeing more substantial uplifts as general designs improve.
So with compute stagnating and memory constrained, my money is on vendors taking this as an opportunity to gradually shift away from a yearly release cadence and slow down to a biennial cycle that alternates between budget and flagship launches every other year. Even if LLMs fail spectacularly and all that memory capacity becomes available, HBM memory likely isn't to find its way into many consumer devices (just ask AMD how it worked out for them on consumer GCN GPUs).
The name of the game, especially for consumers, is efficiency - "potato builds", as I've been calling them. Software and services optimized for lower power, smaller-specced devices of increasing age instead of pandering to flagship devices with poorly optimized code or engines for the sake of new shinies (like Raytracing). Between the memory shortage, shifting geopolitics, rising costs, and stagnant wages, consumer purchasing power is going to be squeezed like a vice for the foreseeable future, and businesses will need to adapt around that reality.
So with compute stagnating and memory constrained, my money is on vendors taking this as an opportunity to gradually shift away from a yearly release cadence and slow down to a biennial cycle that alternates between budget and flagship launches every other year.
My bet is that vendors will simply discontinue their low margin phones, which are usually the budget phones.
For example, Apple might make fewer iPhone 18 and let it sell out frequently. They’ll use their RAM supplies mostly for the Pro phones.
I don’t think Apple will stop releasing new iPhone Pros every year. The business is too big.
> For example, Apple might make fewer iPhone 18 and let it sell out frequently. They’ll use their RAM supplies mostly for the Pro phones.
Apple has a second option that may not be open to most other vendors - as they've just demonstrated with the MacBook Neo, they could cut the RAM in half on the budget models. One good cycle of optimising the hell out of their (almost entirely native) software stack, and iOS would once again sing on a 4GB SKU.
I mean, that's the correct short-term read, but if LLMs in hyperscalers remain commercially viable to the point of tying up memory for several years, and if that necessitates an expansion of memory fabrication to satiate unmet demand, and if that demand ends up getting hoovered up by AI companies again due to their unmet or delayed demand from technological adoption, then Apple et al may not have much of a choice but to adopt such a profound strategy change.
There's a lot of 'ifs' there to be sure, but they'd be fools not to at least discuss the possibility internally and understand their options.
Haven't they already proven to be extremely useful? In some areas they are definitely here to stay, coding/software and search (retrieve and summarize information). There's a bunch of places where they are surely shoehorned in, overhyped, and don't belong, but there's also equally many places where they might still be transformative but aren't used yet.
But overall I think the technology is well proven.
I always leave room open for failure, and that approach has generally served me well personally and professionally. I have never been punished for having an exit strategy.
Besides, the marketplace is still in its infancy for LLMs, with a lot of unanswered questions. A lot of those questions surround the commercial viability of frontier models on bespoke hyperscaler data centers with limited usage outside of LLMs specifically should those economics be non-viable. Since that's where the memory is being tied up into, that means it's a critical question to answer in order to determine long-term investment needs into further memory fabrication.
I appreciated the detailed breakdown of the memory crunch and how it will affect parts of the industry and consumers. Very good article.
I'm not one of those people who chases all the new great things. I wait until things wear out or become completely obsolete before upgrading. I just get comfortable doing things the same way every day and see no reason to waste money on SaaS shit or anything else wastes my time or money.
I think the memory shortage will present opportunities for those willing to take advantage of the situation. A lot of DRAM is going into GPUs for data centers in AI work. Those units have a limited lifetime online and they will be rotated out and replaced with new units as performance degrades. I think this will be a lot like Li-ion batteries in that many of these GPUs will be perfectly fine for home pcs or small business workstations or for other less intensive use cases and the RAM will be performant enough that a viable recycling industry should arise from this AI buildout.
Funny enough, one day the local AI noise-making, power-wasting, water-wasting data centers will be the best places to score high-tech components and many of us will have one right down the road. That should set a lot of people up as recyclers redistributing reconditioned components to those who build their own systems.
Last week I spent some extra time on a ticket in order to write a slight refactor that saves some RAM. If I had asked my boss for an extra day to implement this I would have been chastised for not delivering faster.
Thankfully my colleagues saw the value in what I was doing. I smuggled the optimization into my PR with their approval. Anecdotal, but there are still people who care about efficiency out there.
That being said, unless your manager is John Carmack, or you work in embedded systems, time spent on reducing memory footprints is seen as wasteful by the business.
> time spent on reducing memory footprints is seen as wasteful by the business
I think that there is a way to change that.
If an application runs significantly better on lower end hardware while delivering the same results, the customers should prefer it. It is just a matter of promoting it that way.
Might get some ingenious creations from poorer countries, like how in China they mod RTX GPUs to have more RAM because of export controls. Maybe some souped up Xiaomi devices with insane amounts of memory from old donor parts? Custom ROMs/postmarketOS for ultra low end devices that wouldn't normally get them but needed because they're going to need to last a few more years?
I work in healthcare imaging. The DRAM crunch is translating into significant increases in costs - because reconstructing images from raw scans is a compute-itensive process; and that gradually translates into product price increases. And then, healthcare providers may well opt for cheaper, lower-tier medical scanners, since they can't afford the better ones; and then finally you get less accurate scans if you're suspected to have cancer or whatever.
So, that's another way we are financing the LLM machine and the trillion-dollar valuations of those corporate behemoths.
I can't say I've noticed specifically. I have two tracfone accounts and a Cricket account so used to use the Android phone with Cricket after two months - a free phone. But tracfone was bought by Verizon and they being them immediately changed the unlock period from two months to a year. So that to me kills my use case of free smartphones as I don't want to spend any money on phones.
So, if you were wondering how come LLM services are cheap or gratis - now you know another group of people bearing the costs: The poorer half of humanity, who will now not be able to afford a smartphone, i.e. not having access to a computer. Sure, that doesn't kill you, but it is quite significant personally and socially.
At Xiaomi's latest smartphone launch event, Xiaomi founder Lei Jun said that memory prices are likely to keep rising over the next two years, which could drive smartphone prices up as well. His conclusion was pretty direct: everyone should just replace their phones now. Kind of a depressing story.
But aren't there plenty of used expensive phones from the last 5-7 years that are more or less equivalent replacements for new cheap phones? Apple alone sells 250 million phones a year.
The article takes a while to get there, but it is focusing on a set of companies I hadn't heard of ("Transsion, Oppo, Vivo, and Lava") that buy components from last gen smartphones to make cheap devices to sell in the African and South(/east) Asian markets.
Presumably the supply of 5+ year old used phones that fully work is not enough to meet that demand, which is why these frankenstein Android companies exist.
The deep dive on memory market dynamics and the LLM bubble distortion is great. But another cause of declining smart phone sales is simply that the devices have matured and aren't improving at nearly the same rate.
From 2008 to around 2015, upgrading every two years could make a meaningful difference. From ~2015 to ~2020 upgrading every three years might be worth considering. I just upgraded my top of the line flagship after nearly six years. And I actually looked for compelling reasons to buy a new phone every year since 2023. There just weren't any.
Frankly, this latest flagship phone is pretty underwhelming. It's slightly faster at a few things. The battery lasts a little longer. The screen can get a little brighter. The camera is supposed to a little better. But those are just the claimed improvements. I haven't actually noticed any of them in daily use because they weren't issues with my 2020 flagship phone either. Otherwise, the new phone is almost exactly the same size, same weight, same resolution, same look and same capabilities. I only upgraded because I was long out of contract and it was a only a couple hundred bucks for a $1400 MSRP phone with a new contract and a trade-in of the old phone.
Yeah, I mostly upgraded to get the magnetic charger on the back of my iPhone. Weren't a lot of other compelling reasons - the already pretty great cameras improved a bit, the screen is a bit nicer, but otherwise its much the same slab of glass.
Ever since I started working from home I barely use my phone, I just buy a mid range phone, and it seems just as capable as high range phone in most every practical way. The only real thing that seems a bit better is the camera, but I don't actually use it that often. The only thing I've really been a bit tempted by is Lidar on Apple, but more for dev fun that normal practical purposes.
> The only thing I've really been a bit tempted by is Lidar on Apple
Maybe in that vein, one thing I wish phones would do to differentiate themselves is just add more sensors. I want my phone to be the tricorder from star trek. iPhones should have first party support for generating point clouds and measuring distances using lidar. Their microphones are probably already calibrated, why not expose that as a decibel meter. Same for light sensors. Phones used to have IR emitters, why not add those back in?
Also the iPhone still only has 240fps slow motion, I've found samsung's 960fps really useful in capturing transient phenomenon or even measuring mundane things like LED flicker.
Conversely the Pixel seems to be the only one shipping with an IR thermometer, and they'll probably remove it given most people don't seem to care. That's something I would've found useful in ad-hoc situations where I've had to make do with the back of my hand.
Air quality detection (especially pm2.5, CO2, and CO levels) would be great but I don't know if those sensors can be miniaturized enough to fit.
I so wanted one of those, but then when I heard about their poor to non-existent software/OS updates, I stayed away. I'll stick with my USB-C FLIR dongle.
That's the problem with non-Google and non-Apple phones.
Yeah I'm still using an iPhone 12 from late 2020 and it's honestly still fine in terms of its processing power, cameras, features etc. for anything I use it for. It does need a new battery but even that has degraded way slower than earlier phones I've had.
I was using an iPad Pro from late 2018 (mostly just for casual web browsing, reading documents and watching video on, I still do all my real work on laptop/desktops) as well until this year, and would have kept using it if I hadn't accidentally dropped it in water. I don't really notice much difference at all between my old one (when it worked) and the new iPad Air I replaced it with, except for the battery being a little better and having a bit more ram being nice (websites in background tabs are less likely to be purged from memory when I come back to them).
> We’re already at the point where marginal buyers in the poor world are getting priced out of the smartphone market. We’re rapidly approaching the point where buyers in the rich world feel the same thing.
What does it improve, in practice? For myself, I need my phone to make phone calls, take photos/videos, occasionally run apps, and to be a wifi hotspot. My iPhone 6S did all of these well enough that I only upgraded it recently because I dropped it and bent the power button. My new phone has a slightly nicer camera and better battery life, that’s about it.
I actually also do not find new phones that much of an improvement, but just to be a devil' advocate:
1. High-resolution screen, finally approaching paper (600dpi)
2. High-refresh rate screen, up to 240 fps. Once you see 60 fps, you are already hooked, and 240 is just mind-blowing.
3. High-resolution camera, 50 Mpx means that the camera actually starts to match paper (600dpi)
4. Slo-mo camera (240 fps) to match the screen.
5. Decent memory sizes. On my recent 24 Gb size memory I can actually run multiple apps in parallel, and they are not getting killed. You see, using all available memory is a competitive strategy for app developers -- when they use all the memory, their competitors are evicted from RAM and the user is less likely to receive notifications.
6. Decent sdcard size (1Tb). Same reason for the storage. App manufacturers are trying to use all available space, so that you would delete the competitor's apps in order to keep using theirs.
7. HDMI over USB -- finally you can connect a keyboard and a monitor, and get rid of your laptop, just use one device for everything.
> Once you see 60 fps, you are already hooked, and 240 is just mind-blowing.
I'm a sample size of one, but I'd rather have 20% better battery life (this would extend the life of a three year battery to roughly four years) than eye candy. Extremely aggressively glued-in batteries turning into hazardous gas packages are the only reason I replace portable computers these days.
And -given the history of such things- lack of care in system design means at year two or three, you'd find that your phone very, very inconsistently delivers 240fps. I think it's pretty widely known that once you get to somewhere around 15 or 30 FPS sudden variation in frame rate is far, far more noticeable and unpleasant than rock-solid "low" frame rate. [0]
[0] That is, a 240 FPS system that janks down to 30 FPS every few seconds is gonna be considered much less pleasant to use than one that always runs at 30 FPS.
This is another place where modern capitalism struggles in an area that requires large capital investment producing payoff after years of startup costs, and the buy side is volatile. We've seen this recently with rare earths, copper, and some other minerals. DRAM is almost in the same category.
China has an advantage here, once domestic DRAM production finally gets going.
DRAM policy can be set strategically. China's economic planners may choose to provide DRAM to domestic manufacturers rather than export parts, even if exporting parts would be more profitable in the near term. That's already being done in raw materials.
Conversely, if external suppliers have lower prices, there may be a policy decision to buy domestically to keep the domestic manufacturers going. Done with the goal of leveling production, this can work. Done stupidly, it becomes a money drain, of course.
Probably China controls the DRAM market around 2030 or so.
Maybe it's time to go back to the time where computers and entertainment were niche and develop efficient resource-constrained devices....
I hate it that we had decades of progress to have computers become a very expensive hobby because some dudes high on fentanyl think some text prediction model that destroys the planet is worth a trillion dollars.
I've been buying a "new" used iphone for $100-150 now, every few years, for over a decade. My "new" used Dell laptop I bought a few months ago for $40 which became a linux system in just an hour. All good here.
I’m really wishing I had overbuilt my NAS last year. As it stands I feel lucky to have even built it at all given I bought all the parts in the last week of September.
My 4090 and 12900k are gonna have to last till 2029 at this rate won’t they…
Processors are currently becoming the next bottleneck on the server component side of things. If consumer SKUs start seeing even less volume than they are today, manufacturers will simply produce more for the datacenter.
Certain popular AMD SKUS are already 120 days lead time and growing. If a vendor will talk to you at all.
I expect motherboards to get cheap until they get to be really expensive niche products should the current situation last a few more years. At least as we know them today as PC enthusiasts and/or prosumers. I could very much see that market evaporating entirely and moving towards large integrators instead. Gamers and such were already a rather small niche to begin with.
Right now the saving grace is a server board doesn’t look a whole lot different than a consumer board. But that may change significantly faster than anyone predicts should current trends with SoCs and the like continue. You may be in a place soon where you get to choose your CPU/RAM/storage at purchase time like you do with a MacBook today.
I'm a newborn shill for Ulefone. They come unlocked and the manufacturer supports rooting. The devices are rugged, heavy on features and are (still) reasonably priced.
So the availability of cheap phones is going down because of the cost of RAM.
What about the RAM consumption trend of the last 10 years? I think it is very feasible to produce phones with the same amount of RAM as was the norm 10 years ago. The only compromise would be using older algorithms and features that consume less of it, and to take a bit of effort on keeping an eye on memory consumption in the development phase. There's a lot of opportunity. We can even leverage AI these days to optimize existing software for RAM usage.
What was most surprising about all this to me was this line:
> So modern DRAM manufacturing is an extraordinarily complex and expensive process. Building a single state-of-the-art DRAM fabrication facility, a “fab,” will cost you about $15 to $20 billion; acquiring all the necessary equipment, like lithography tools and etching machines, will cost you another few billion; and then it’ll take you a few years of producing substandard and defective memory chips before your yields start to look competitive.
Extraordinarily complex and expensive! And yet I look at all the money being shuffled around between Nvidia and Google and Microsoft and Amazon and Apple and can't help but think that this is a tiny amount in comparison to what they're moving around on the stock market buying shares in each other.
Apple in particular has $20B in its couch cushions and is very vertically integrated and hardware-focused. Apple silicon is currently made by TSMC, but it seems they'd be a prime candidate to spin up their own memory fab.
I suppose the biggest problem to current executives at each company is the "few years" until that investment yields results, in the short term it's better to pay through the nose and buy GPUs with HBM at any price.
> it seems they'd be a prime candidate to spin up their own memory fab.
While Apple et al certainly have the money to tilt up their own fab, they're savvy enough to understand the memory market's long history of constant boom/bust cycles. I still remember the huge DRAM shortage in late 80s forcing my startup at the time to delay launching our new product for a year.
People assume Apple cares about vertically integrating cost but they're actually focused on integrating margin. Apple has billions in cash on hand and when they think about what to do with it, a key metric is Return on Capital, especially the margin that capital will generate. Since a core metric public companies are judged on is blended margin, they are looking for ways their bags o' cash can be put to work generating revenue at margins that will pull their current average margin up vs down.
Averaged over time, mainstream memory devices are historically one of the worst margin areas of the semi market. It's super expensive to tilt up a fab on a new node but once you do, turning the crank faster to make a lot more chips isn't too hard because mainstream DRAM tends to be quite uniform. So when a fab on a new node and/or RAM generation first opens, the margins tend to be pretty great. But as the node matures and/or the RAM generation goes from 'new' to 'commodity', competition heats up as everyone gets better at making more faster. Then they're tempted to maximize revenue by cutting prices until their mature fab is at 101% utilization. And that eventually drives margins down until someone's selling near cost to sustain their low-price-enabling volume - with occasional dips below cost when they get stuck holding excess inventory. That's why cash-rich companies with high margins like Apple are delighted to buy DRAM built with Other People's Money. As long as the DRAM market is under competitive pressure, Apple gets to shop their huge orders around to get the absolute lowest price on RAM that was built with other investor's low margin dollars.
To reframe your great comment:
Is it fair to conclude that DRAM is basically a commodity that can be specified well enough by a set of parameters?
If so it won’t allow you to get any competitive advantage in your products and thus wouldn’t be a business you want to be in as Apple.
They are not just shuffling money around though.
Nvidia sells all the stock, prices for GPUs moved up not down.
Companies like Apple don't want to be in every industry. Its risk, its cost, its expertise you need.
And sure you can throw money at it but you need people. Alone hiring all the experts is probalby not that easy. Who knows how to setup a DRam Factory?
It takes years to build this up
And what happens if the market settles back down or the leading memory tech pivots away from what you invested all this capital and time chasing?
You'd need a very strong, very particular forecast to make such a costly bet. And conversely, it may say something about their internal forecasts that they're not making the bet.
> And conversely, it may say something about their internal forecasts that they're not making the bet.
Idk if you can read into it that way.
All these companies have cafeterias but you don't see them investing into farmland so they can get their bananas a few cents cheaper.
But also why bother spending 20B on a fab when you can invest 20B into TSMC and let them build the fab?
Because having every major company in America’s eggs in one basket is as insane as it gets, especially with China bearing down on Taiwan.
That’s an entirely different framework, one that doesn’t concern investment decisions of Apple or Google.
I do agree that USA and EU could foot the bill and subsidize a couple billions in such industrial infrastructure, perhaps taking back a cut of the profit rather than privatizing all of it.
But they’re not doing it, or are making pitiful efforts at that
Meta spent more on the Metaverse, it’s all the most certainly something they can afford to take a hit on and they won’t because memory and CPU usage is only going to go up from this point on.
Why should society care about people making profits? Society would greatly benefit from cheap abundant ram than FAANG shares going up. I'm kinda sick about only caring that some billionaire makes more money and would rather you know... actually improve conditions to better society.
This is why China is eating the West. Quite easy to start an electronics company when you have such an abundance of suppliers, compare this to America where there is maybe one or two players in the entire nation.
Quite pathetic, but we live in a pathetic world so it tracks.
> This is why China is eating the West.
Nothing to do with cheap labour.
No, nothing to do with that. Even Steve Jobs said so back 20+ years ago, about why Apple can't just get out of China manufacturing.
He said the labour cost is neghigible and not qualitatively different to the US. It's the availability of every part and tech you need in nearby supply centers and factories, the huge supply of appropriate resources, including the ability to have tens of thousands of expert workers on command for a fast new production run.
Labor has very little to do with it and more about a political class that has to increase the material needs of a nation if they still want to stay in power.
What has the US government done for American's lately outside of forcing people to buy healthcare and providing monetary support for families for a small window during covid? All we have is a political class that wants to fuck Americans raw until they pump every cent out of us.
Also the US has one of the most weakened labor classes in the world, come the fuck on. Corporations convinced our governments to sell out labor at every opportunity. You're acting as if it was the 1930s where there was a national strike every month until the Wagner Act.
We're also eagerly taking advantage of their cheap labour and we're taking advantage of plenty of people here at home, sometimes to the point of literal slavery (it's okay when they're prisoners or immigrants)
Chinese labour isn't very cheap anymore.
You think Chinese businesses aren’t in it for the profits?
While these private companies exist and are in it for the profits, they don't control the government, meaning any potential price gouging is strictly regulated. The Chinese government actively prevents private companies from becoming too powerful or dominating an industry in the public eye. Instead, they foster competition by promoting and building up alternative companies.
A great example of this is how they handled digital payments. While Visa and Mastercard maintain a monopoly in the West, China faced a similar situation when private mobile payment systems began dominating the market. In response, the government stepped in and forced the ecosystem to open up to competitors.
I wouldn't characterize it as forcing to "open up". It's true they put an end to some of the most egregious anti-competitive practices, but the Chinese tech ecosyatem, including payments, is still notoriously non-interoperable. For example, there's no way to transfer money between WeChat Pay and Alipay.
The relationship between Tencent/Bytedance/Alibaba is what happens when there are no monopoly laws or they are ineffective: every company fighting tooth and nail to corner every market with a single "super-app". No specialization at all and many races to the bottom, like the recent war between Alibaba, JD and Meituan over instant delivery that made every company involved lose a lot of money.
But not open up to competitors like Visa.
They are but the difference is that China doesn't want to encourage monopolies and have zero qualms in jailing or executing bad business leaders.
There absolutely are monopolies. There are, in fact, many state run enterprises. Where do you get these ideas?
State run is better than a private for profit monopoly or few-o-poly which is what we get.
People all over the world have often revolted to get some enterprises state run (nationalizing) and were often punished or even bombed for it.
My understanding is that the Chinese government prefers to have multiple successful companies in each field and they don't like it when one company becomes too powerful.
They pivoted away from that quite a while ago now they just disappear people for a week or two and randomly completely crush a business here and there to make sure they understand their place.
I wish we could give the Elons and Thiels and Ellisons the same treatment...
But those are mostly companies who provide a public service, or am I wrong?
I own FAANG stock because I own the S&P 500 in my retirement accounts, and so do managed pension funds. There's a lot more than billionaires who benefit from FAANG shares going up in value.
I agree, the sentiment that billionaires are the only beneficiaries of share value increases is misinformed, but the mentality of profit chasing is a long term security risk not just to the nation, but to the continued rise in value of said shares. Once China has enough of a grip on their domestic attempts at semiconductor fabrication, these company's supply chains will be completely compromised, allowing China to practically swap out any of these FAANG companies for Chinese counterparts over time. As long as the US, UK, EU and FAANG continue to do next to nothing to develop domestic chip fabs and supply chains, it is only a matter of time.
It's a cycle. The zeitgeist moves from communism to capitalism and vice-versa every 30 years or so.
Society should care about people making profits because otherwise those people do something else instead of providing goods and services. What happened in Communism is instructive on this point. Now if you want to argue that the pursuit of maximum profit as an end is a problem, there's a case to be made. The US had something like a marginal tax rate of 90% around the 1940s/1950s, if I recall correctly, and it obviously didn't hurt innovation, but people got paid in perks and corner offices and status instead of just money.
I think people are misled by Marx and derivatives, and misdiagnose the problem. I don't think people are upset by the CEO making lots of money as much as they are by the HBS management style of using people as a tool, or even as interchangeable "resources". However, the philosophical materialism of Marx & Co. pretty much makes this inevitable. (The secular view is also materialism, so you get it on both sides.)
Perhaps it’s not capitalism that’s the problem but the unboundedness of the greed of a few, with respect to the other needs of humanity.
Also Adam Smith implied that unbounded avarice is irrational and disruptive to society.
The assumption is that morality survives grotesque wealth accumulation, we see many examples proving otherwise
Call me crazy but society should care about giving people meaning, providing healthcare, and an education. You know the three things that lead to productive humans.
Notice in my comment I mention nothing about taxes? Maybe people are mislead about neoliberalism? All it has done was sell out American jobs, get civilians addicted to drugs, and manufactured a political class that cares about donations over material needs.
This is an economic system that isn't even 50 years old and you're already going with the Marx scare quotes as if US branded capitalism hasn't already killed 10s of millions of Americans in the pursuit of profit.
Let's not even peel back the founding of this nation, a colonial white slaver state with minority protections baked into the constitution to impede people's chances of progress with every life.
> Why should society care about people making profits?
The people making profits are the ones providing food, shelter, and phones to you.
No, the real people providing the food, shelter and electronics are the generally the lowest paid in society.
Nope. They're the ones making those more expensive, via collusion, rent-seeking, monopoly capture, and lots of other ways.
Part of this is a lie high prices for equipment has a lot to do with monopolies in the whole supply chain and one of the major reason I am rooting for China to get parity on node as that would mean it would have been able to break all the monopolies and we get competition on the whole production from uv machines, wafer, on equipment for storing etc. Renewables are rapidly taking the world to very cheap or free energy but it would be bad if the way to best use the energy for production is controlled by a few corporations
While I think Apple is a prime candidate to do something like this financially, I’ve never had the impression that they ever want to get involved in something “just” for vertical efficiency. There’s always a long-term vision where they can leverage it to gain a competitive edge that their competitors can’t match (the PA Semi acquisition being a perfect example of this).
RAM doesn’t seem like something where simply owning the manufacturing could lead to a disproportionate competitive edge. It would just be a vertical efficiency gamble that may or may not pay off. Of course that could simply be a failure of my imagination.
> Apple in particular has $20B in its couch cushions
I wonder how long it REALLY took them to move from intel to apple silicon, which they don't even make.
It might be easy, like a consumer deciding to generate their own electricity (pv on the roof)
or it might be slightly harder, like a consumer deciding to generate their own electricity by drilling for oil, refining it, etc...
Well, they acquired PA Semi in 2008, they used their first chip (the A4) in the iPad in 2010, and they progressively iterated using the chip in phones until they announced the switch from Intel in 2020 (concurrently, more or less, with the A14). So it took them 12 years and 10 different chips.
It’s hilarious that they’ll spend a trillion renting GPUs instead of just making their own.
Even if you were nowhere near state of the art, being able to produce millions of your own cards every year at cost would save you a lot of money.
Apple, Google Microsoft Amazon should all set up memory and CPU fabs. I don’t understand why they don’t do it. $400 million ASML machine is chump change and you can almost certainly find/train locals or provide incentives to immigrants to come here as workers to fill the roles there.
Well, isn’t Musk doing something similar with his new solar panels fab?
Frankly it’s ridiculous how we (the West) dropped renewables like a hot potato because it became synonymous with subsidizing China’s dominance in the field.
Literally the most overwhelming thought, reading this, is "man, capitalism is a mistake"
The amounts of money circulating whilst some of us struggle to make rent ...
Nothing fair, or just, about this world we live in
> , is "man, capitalism is a mistake"
Man, we need a better term for this criticism.
The US right now is more harsh to live in than the US pre-Reagan, which was more harsh than many countries with a strong welfare state, but all of them are capitalistic.
> Nothing fair, or just, about this world we live in
We all make different choices, and so have different consequences.
For example, I squandered the proceeds of a business deal on a new car. If I'd bought MSFT instead, I could have bought 100 new cars.
China going capitalist ( while remaining authoritarian ) has helped lift 800 million out of desperate poverty.
I hope that India too can emulate this in my lifetime. I was born in Kerala and would love to see Indians live in a country that is as wealthy per capita ( PPP adjusted ) as Singapore or failing that even as wealthy as the USA.
Capitalism has it's problems. But you struggling with rent is entirely your self-inflicted problem...
> But you struggling with rent is entirely your self-inflicted problem...
Yeah, that one guy and 70% of the country https://www.yahoo.com/news/videos/70-americans-struggle-pay-...
So why aren't those people lining up to try and emigrate to non-capitalistic countries for a allegedly better life?
Instead for the past century we have almost everyone in the world wanting or not minding moving to the hypercapitalist USA.
Ironically almost all the countries with emigration controls and exit visas in the past century were noncapitalistic countries trying to stop their people from fleeing to capitalistic countries.
I don't know what you would define as "non-capitalistic" or why you'd limit your options to only those countries, but the idea that people can just pack up and go to live wherever they feel like is incredibly naive.
The reasons Americans don't just move to whatever country they think they'd enjoying living in the most are often the same reasons most people all over the world don't. They have a life here. Family, friends, jobs and other ties to their community that would be hard to leave behind.
Uncertainty and fear also keep people from moving their lives to new countries. Especially when they're going to a place where they don't have friends and family to help them with things like expenses and childcare.
Americans in particular are unlikely to speak anything other than English and while English is often understood to some extent many places overseas it can't be assumed to be avilable everywhere. Understanding the local language is often a requirement for getting citizenship in a country and not being fluent will be a hindrance even where it isn't explicitly required.
It's also very expensive to move. You'll need to have enough money to live somewhere and feed and clothe yourself the moment you step off the plane. You'll need to store all off your things someplace until housing can be secured and that can take a lot of time. Countries can require thousands in fees to apply for citizenship and people struggling with basics like food and housing aren't going to be able to afford that. About half the country doesn't even have a passport and the expense of getting one (along with the needed documentation) would be an additional burden.
Other countries don't necessarily want you. Immigrating is difficult. Unless you can demonstrate that you've already got someone willing to hire you (and effectively vouch that you won't be a financial burden) or you have some much needed skill or one that a native citizen cannot perform you may not be welcome. No nation is obligated to accept responsibility for you just because you want to live there.
It'd be great if everyone everywhere could just pack up and leave to start a life wherever they felt like it, but there are many reasons why that just isn't realistic. There are tens of millions of people America right now living in places without safe drinking water because of heavy metal contamination. Why do you think they don't just pack up and move to cities with drinkable water? What about the tens of millions of Americans who live within one mile of toxic waste sites that have been linked to infant deaths, cancers, and other serious long-term health issues? Why don't they just move? Forget about America, how about all those starving Africans just move to somewhere with lots of food? The world just doesn't work that way.
Some countries have walls to keep people in, some have walls to keep people out.
> the idea that people can just pack up and go to live wherever they feel like is incredibly naive.
That's how America was populated. In the last 5 years, millions of people walked from South America to the US. Walked!
The tax increases in New York, California and Washington have resulted in an exodus of wealthy people.
Those factors apply to non Americans wanting to move to the US but it's apparent that there is heavy demand to the extent of millions taking dangerous trips and breaking laws just to get a foot into the USA. You cant find such latent demand to the same extent via surveys or visa applications in the other direction.
> But you struggling with rent is entirely your problem...
Who said anything about struggling with rent? Sounds like you a grasping for a straw man.
> I hope that India too can emulate this in my lifetime
I, too, hope the best things for the people of China and of India. But India, by any metric, is already a capitalist economy, where its wealth is concentrated in the hands of a very few.
To the extent that China has been successful is distributing its wealth among many people, I'd say it's the authoritarianism, rather than the capitalism, that has been instrumental. The state sets agendas, quotas, and salaries specifically to produce that outcome. Top-down government control is not a feature of unbridled capitalism.
So we have two large industrializing economies, both capitalist. One (the authoritarian one) has succeeded in drastically reducing poverty; the other has not. And yet you think that capitalism is the driver of equality?
Capitalism produces wealth. You need some other system to distribute that wealth fairly.
> Who said anything about struggling with rent?
The person they replied to, in the very comment they replied to…?
> > > The amounts of money circulating whilst some of us struggle to make rent ...
> capitalism is the driver of equality?
Nope. It is the driver of opportunity, though. It's up to individuals to take advantage of the opportunity, or not.
>It's up to individuals to take advantage of the opportunity, or not.
The problem is that after decades monopolies consolidated and you have massive offshoring of labor to cheap countries and offshoring of profits to tax havens, there's not much opportunities the working class individuals can take, as all the opportunities are now geared towards the asset owning rent seeking class.
There are endless businesses you can start with little to no capital.
I would be curious to see those stats that show they are no longer in poverty, as poverty is relative, aka when rent goes up many still can't afford it. Just because they have more money coming in, it doesn't mean they aren't poor. Wealth per capita in the UK, US, Germany, and so on is good but there is still rampant poverty in each where people struggle to afford food, housing, and utilities. The wages don't match the outgoings.
"while remaining authoritarian" implies that Authoritarianism is an exclusive trait of Communism, which is the most absurd thing I've ever heard. Use any Capitalist country with an Authoritarian leader as an example.
There have been 20,000 communes set up in the US. None were authoritarian. They all failed anyway.
Courtesy of TFA and capitalism:
"In 1985, if you were a reasonably affluent American, the best computer that you could afford was the IBM PC AT. The PC AT would cost you about $6,000—$19,400 in 2026 dollars—and thus represented about a quarter of the median American’s annual income; and it ran on an Intel 80286 processor, capable of something like 900,000 instructions per second. Today, if you find yourself in a market stall in Nairobi or Lagos, you’ll be able to find a cheap smartphone—like the Tecno Spark Go, manufactured by China’s Transsion—for somewhere between $30 and $120. That phone will run on a processor capable of billions of calculations per second."
This quote has nothing to do with capitalism.
Please note that "commerce" and "capitalism" are not synonymous, and that the former does not imply the latter. Capitalism is in no way a prerequisite for technological development.
> Capitalism is in no way a prerequisite for technological development.
Communist countries copied technology, their inventions are very few. Capitalist countries routinely exhibit rapid technological development.
I mean we don't really have any counter examples even China didn't really start advancing in any meaningful way until they started moving towards capitalism.
Capitalism is in no way a prerequisite for technological development.
Really? Who else builds stuff?
>Who else builds stuff?
The Chinese, famously?
China is a great example of a counter point to the argument. They only started making things once they realized capitalism was better.
https://en.wikipedia.org/wiki/Reform_and_opening_up
> The reforms [starting in 1976] de-collectivized agriculture, abolished the people's communes, relaxed price controls, allowed foreign direct investment into China, and led to the creation of special economic zones, most prominently the Shenzhen Special Economic Zone and the Shanghai Pudong New Area. Private enterprises were allowed to grow, while many state-owned enterprises were scaled down or privatized. Shanghai Stock Exchange and the Shenzhen Stock Exchange were established in 1990, allowing a capital market system
> They only started making things once they realized capitalism was better.
Free commerce is not the same as capitalism. A country where production, wages, and ownership are decided centrally can hardly be said to be unfettered capitalism.
> A country where production, wages, and ownership are decided centrally can hardly be said to be unfettered capitalism.
The reforms in China I listed heavily cut down on that. Are you claiming that China is somehow less capitalistic now compared to 1976?
By your metric the US isn't capitalistic because NASA and various govt agencies and entitlements worth trillions of dollars a year of taxes exist.
Please avoid straw man arguments. I didn't say that China didn't use capitalism: I said that it didn't use unfettered capitalism. Its capitalism is strongly tinged by its authoritarian rule with the explicit goal of reducing poverty.
The US, like China, continues to use a mixed approach to economic management in the form of regulated capitalism. The degree of regulation in the US has been declining since the 1950s, resulting in larger wealth inequalities and more poverty.
> The degree of regulation in the US has been declining since the 1950s,
Nope.
prompt for google: "have regulations on business increased since the 1950s?"
You don't have to demonstrate this kind of ignorance of human history on main. Aren't you embarrassed? Do you value knowledge even a little bit?
When did capitalism begin? How was 'stuff' created and distributed prior to that? How do other, distinct and contemporaneous modes of production create 'stuff'?
Capitalism began when Thag, who was a good hunter, brought home two dinosaur steaks. His buddy Grog was a lousy hunter, but was good at making spears. Thag traded a dinosaur steak for a new spear.
> Really? Who else builds stuff?
Said the Christian in pre-Englightenment Europe: "Well, of course Christianity is the one true religion. After all, the whole civilized world is Christian."
That doesn't answer my question.
That's because your question is silly. I'll spell it out for you: Just because all modern states are capitalist does not mean that all states must be capitalist, as evidenced by the many erstwhile states that were not capitalist. Your failure to see beyond your immediate surroundings and ignoring the first sentence of my previous comment is perhaps the reason for your silly question.
> Just because all modern states are capitalist does not mean that all states must be capitalist, as evidenced by the many erstwhile states that were not capitalist
However, I doubt anyone else would instead want to live in current day North Korea or pre-1990 eastern bloc countries, or in East vs West Germany.
> However, I doubt anyone else would instead want to live in current day North Korea or pre-1990 eastern bloc countries, or in East vs West Germany.
An astute observation, if your knowledge of history begins and ends with the 20th century.
So not a single country out of ~200, not one, emulated the alleged great successes and utopias of historic non-capitalist economies for a century plus. Which is why you're unable to name one in the 20th century. Hmm I wonder why.
Maybe we can look at societies where the modern era hasn't touched, like some places in Africa. Why is the quality of life so great there that everyone wants to move from hypercapitalistic societies like the US to Africa instead of the other way around?
Wow, talk about moving the goal posts. I was pointing out that capitalism has not always been the universal economic system, and now you're trying to make me explain why years of exploitative colonialism and corrupt authoritarianism haven't yielded a better alternative. Well, isn't it obvious?
300 hundred years ago, every country in the world was ruled by an absolute monarch, and that fact alone was considered persuasive explanation of divine will: the world must always be thus. Since then, the philosophy of rulers has changed, but small-minded apologists for the status quo have not evolved in their thinking. "If our current approach isn't the best option," say the small-minded apologists, "why isn't anyone doing anything different?" The answer to that question, in case it wasn't obvious, is the same as it was 300 years ago: entrenched interests.
Are you seriously arguing that it is impossible to allocate today's abundance of resources in a more fair and productive way than our current system does?
The problem is that your proposed approach has been tried again and again and has failed every single time with disastrous consequences for several generations.
Once people are given all the resources they want they are not motivated to work. The productive people get tired of the product of their hard work being forcibly taken away and stop working since they would be given resources anyway. That's how the system collapses since there aren't enough resources for everyone to sit and consume. Thats exactly what happened in the eastern bloc. https://www.chron.com/neighborhood/bayarea/news/article/When...
How many times should we run the same failed experiment and ruin millions more lives?
https://www.africadatahub.org/blog/what-usaid-funding-of-afr...
https://www.ft.com/content/c10e4f2f-5564-42a4-8aa7-66c78ca1c...
https://finance.yahoo.com/economy/policy/articles/kathy-hoch...
That has little to do with what I said.
A third of the world lives in poverty. That's the fault of capitalism.
About 90% of the world lived in poverty before capitalism.
Besides, America's poor have a higher standard of living than medieval kings.
> A third of the world lives in poverty. That's the fault of capitalism.
So what you're saying is that capitalism lifted about two thirds of the world out of poverty.
Thanks to capitalism, I don't have to toil in the fields.
> Thanks to capitalism, I don't have to toil in the fields.
No, that's thanks to commerce not to capitalism. Capitalism benefits those those who hold capital, which is not me.
The fact that there are more than enough resources for no one to live in poverty should suggest to you that something is wrong with the distribution system.
"It's true, Mr/Ms Rationalist, that our patented Miracle Medical Snakeoil caused a third of your leg to become necrotic and fall off, but be glad for the two thirds that did not fall off!"
> > Thanks to capitalism, I don't have to toil in the fields.
> No, that's thanks to commerce not to capitalism. Capitalism benefits those those who hold capital, which is not me.
Are you toiling in the fields? It seems to me like your attitude is that "If I can't be rich, then no one should be rich."
> The fact that there are more than enough resources for no one to live in poverty should suggest to you that something is wrong with the distribution system.
So instead of two thirds of the world not living in poverty, everyone should live in poverty equally?
> It seems to me like your attitude is that "If I can't be rich, then no one should be rich."
The problem with capitalism is not that some people get rich and some people don't. The problem is that of an unfair playing field.
Everyone has a body and a mind, and commerce allows us to rent out those features in exchange for pay. People who are smarter or stronger or work harder or work more will be able to benefit more. That's how I got rich. But there's a limit to how rich I can get, because I have only one body and one mind and there are a finite number of hours in the day.
The other way to get rich is to own things. If you own a factory or real estate or bonds you get to charge other people and make a profit even though you are expending no effort. And in this case there is no limit on your profit, because you can use your profit to buy more capital and make more profit from that. The result is eventually a winner-take-all economy, where the winners own an increasing amount of society and everyone else pays them to use it. If that sounds familiar, it should, because it's feudelism, and is the eventual end state of capitalism.
You should really read a bit about the philosophy that you're arguing so vehemently for, apparently without knowing anything about it.
> So instead of two thirds of the world not living in poverty, everyone should live in poverty equally?
No, that's ridiculous.
> You should really read a bit about the philosophy that you're arguing so vehemently for, apparently without knowing anything about it.
You had a good comment until you wrote that. Don't lower your standards with stupid personal attacks.
> The problem with capitalism is not that some people get rich and some people don't. The problem is that of an unfair playing field.
I would love for things to be fair, but I grew up in the real world and learned that things weren't fair back when I was a kid in primary school.
Instead of lamenting about something that I can't control, I decided to focus my efforts on what I can control. Instead of tearing other people down, I built myself up.
Unless you can change the human characteristic of greed, the world will always be unfair. You can spit into the wind, or you can set a sail.
> You had a good comment until you wrote that. Don't lower your standards with stupid personal attacks.
I apoligize for judging you based on the things that you write.
> Unless you can change the human characteristic of greed, the world will always be unfair.
There is nothing wrong with greed or unfairness, to a degree. As I said in my previous comment, some personal characteristics will naturally lead to inequality of outcome. That's fine, because everyone is deriving profit from the (variable quality) work that they are personally able to produce. I would say that greed and unfairness are essential to any system of commerce, which I support.
Capitalism, on the other hand, allows inequality on a grand scale that necessarily results in a society that no longer rewards hard work: the lords own all property, everyone else works for them, and there is no way to achieve wealth competitive with that of a lord simply by labor. The laborers work to surive, and the owner class consumes all the benefits. This is the system that we spent a century of war fighting to end. It seems silly to go back to feudalism just to appease the modern-day lords.
> Instead of tearing other people down, I built myself up.
Who, do you suppose, am I tearing down? I want a society that rewards hard work. A system with no social mobility is not that system. I want people to improve themselves in order to make more money. What I don't want is a society where the owner class are able to be parasites on everyone else, producing no labor (physically or intellectually) but showing giant profit. The modern day US is increasingly distant from its much more socially mobile past, and it's only going to get worse.
I'm not saying that the current crop of billionaires haven't worked hard to get where they are. I am saying that their work is not proportional to their benefit, and at a certain point they are able to continue benefitting despite producing noting of value.
> I apoligize for judging you based on the things that you write.
I apologize for thinking you were willing to have a decent conversation. I won't waste any more of your time.
> I won't waste any more of your time.
Thanks!
> Thanks!
You're welcome!
> The other way to get rich is to own things. If you own a factory or real estate or bonds you get to charge other people and make a profit even though you are expending no effort. And in this case there is no limit on your profit, because you can use your profit to buy more capital and make more profit from that.
Risk : Reward, that's obvious, isn't it? I have known many relatives who bankrupted themselves trying to "own" stuff. I also know some who succeeded and are rich. Starting a business is very hard, try it.
Really? What other systems are better at lifting people out of poverty (without killing a few tens of millions in the process?)
There are so many other places where this sort of low-effort high-school edgelording fits in better than here.
> There are so many other places where this sort of low-effort high-school edgelording fits in better than here.
A good sign of low-effort edgelording is championing an obviously broken system by using a straw man to disparage the alternatives.
Apple has been using LPDDR in the MacBooks since at least 2015. I remember it was one of the complaint of the 2016-2017 MacBook Pros. They were still using LPDDR3 because LPDDR4 wasn't ready for production yet (despite regular DDR4 being available). The 2018 MacBook Pro's finally switched to LPDDR4.
Maybe author is writing this from an Intel Mac!
Quite possible. He did say his “powerful” MacBook Pro CPU is faster than his iPhone.
I’m pretty sure even an iPhone 11 chip is more powerful than a 2019 MacBook Pro CPU in ST. An iPhone 15 is more powerful than the fastest 2019 MacBook Pro Intel CPU in MT.
I suppose he can be using a 2019 MacBook Pro or older and an iPhone 14 or older and compares only MT speeds.
The headline here under-serves the article in my opinion: this is a fascinating, deep explanation of how the memory market works and why increased demand for HBM (used by big GPU racks) hurts the availability of wafers for DDR and LPDDR (used by laptops and phones).
This also put a lot into perspective:
> these memory makers have learned a very particular lesson from the unforgiving history [deep drops in demand] of their industry: always leave demand unmet
I can't blame them for keeping some reserve demand ready so they keep having customers over the years.
This author has outstanding articles regularly
I heard that one company buying all the product or a majority of the product is called a monopoly practice.
It's called a monopsony[1], regardless, antitrust regulation is famously dead under the current US administration.
[1] https://en.wikipedia.org/wiki/Monopsony
Regulation is dead under this current US administration (unless you pay a bribe). It's so weird this is where we are right now and most of the tech leadership has to play along even though it's technically illegal?
It's impressive that somehow, as if by coincidence, we're seeing the biggest inflationary drivers for decades, perhaps for centuries, all happening simultaneously.
The Iran war is spiking the price of oil and will likely cause shortages of pretty much everything if it isn't ended.
The Ukraine war is helping with that by destroying Russian refining capacity.
The memory shortage is set to do the same to consumer electronics, which are absolutely essential to the modern economy.
Meanwhile the AI fad is seeing huge layoffs. At the same time as the AI Big Cos are beginning to show signs of ending the subsidised free lunch phase and moving to a utility model, which will raise prices for every company that is hooked on AI.
Also tariffs. Although I'm not sure if anyone knows what's happening there.
And farms are failing. Climate change will accelerate that, so there will be food shortages within a few years.
If it's not cynical and deliberate, it's an astounding confluence of (literally) catastrophic mismanagement.
> Meanwhile the AI fad is seeing huge layoffs.
This is really the only point I disagree with. Layoffs are being blamed on AI, but they are really a hangover of the covid hiring boom, and subsequent bust.
All the tech money is going into building data centres (and the gas turbines that power data centres), and it turns out that programmers don’t have the relevant skills to build gas turbines.
A few months ago I’d have been right there with you; however recently there have been a number of high profile multi-thousand-head layoffs attributed to budget pressure of deploying AI - and so technically it’s more of an indirect rather than “a robot stole my job” replacement, but still causal. Those tokens will be “doing” labor, rather than the human.
And building gas turbines (or even designing them) are probably not jobs that pay salaries developers got accustomed to, especially in Sillicon Valley, over the last 10-20 years.
Jobs at GE in Schenectady may not be what those developers are looking for even if they were qualified.
No, but it's a fun line for any automotive or other old-industry workers to throw at programmers, as they were the ones promised re-training in industries they would have to start from the bottom in.
There are a bunch of factors that are intertwining. And unfortunately, some specific demographics are mostly those being most caught in the crosshairs.
It would be a great scapegoat for further monetary expansion related inflation.
Step 1) Instigate price increases for temporary reasons, leading to noticeable price increases.
Step 2) As temporary reasons go away, increase money supply. Prices stay the same, you get to blame the causes from step (1) while not mentioning that the prices could have gone down when the problem went away, or blaming greedy companies for not lowering the prices.
Farms are failing where? More than usual?
New Jersey just declared a state of emergency after an unprecedented cold snap wiped out crops across the state, up to 90+% for some farms.
they are not failing, our Socialist President provides billions in handouts for Farmers so they gonna be just fine
We're losing a lot of workers. Some might consider that a good thing if they hate the idea of a large exploited underclass (or just people of a certain skin color), but it could be a problem for farms if there aren't enough hands to harvest in time.
Let us hope this results in farms offering Americans better wages for working on farms. Only 1% of the retail cost of produce is due to labour. Farms could double wages to workers and it would barely move the needle on inflation.
if they are large corporation owned farms as many small family owned farms are going to go bankrupt in the next 2 years because of the price of fertilizer and diesel and higher interest rate.
Handout for American farmers or Argentine ones?
He destroys trade relations so the farmers can’t sell their produce, then bails them out by taking on more government debt so farmers can dump soybeans in a ditch.
It’s all such a clown show.
Oh come on. What they are trying to do is turn farm owners into corporate farm employees. The handouts are just to keep their votes.
> And farms are failing. Climate change will accelerate that, so there will be food shortages within a few years.
This is the key one to watch out for. Prior food-based conflicts have sparked revolutions and civil wars. People can tolerate not having electricity, people can tolerate not having internet, people can tolerate not having gas.
But a lack of food, due to a wheat shortage which in turn was sparked by Siberian wildfires destroying a whole year's wheat crop in Russia, precipitated the Arab Spring and the subsequent civil wars, as well as the ascendancy of ISIS.
> Climate change will accelerate that
The climate is changing in a positive direction for farming. Farming is easier now than ever before. There's literally no chance of food shortages. Unless, of course, there's another attempt at building socialism.
US tariffs are mostly dead. Ruled illegal and being refunded. Second attempt at tariffs has also been stopped. And inflation over the past 5 years is still milder than the late 70s and definitely milder than what has been seen in Turkey or Argentina or Zimbabwe.
refunded to whom? the businesses? great! where’s my refund as a consumer who paid those higher costs (passed along to me)?
Not to mention that some of the effects that OP cited are either deflationary (like layoffs and automation), or clearly cyclic (like the memory boom bust stages, experienced just a few years ago post COVID).
Ah, the ole’ “were doing better than Germany ca 1937” argument. /s
Don't forget the threat of Ebola, hantavirus, Taiwan war
The Taiwan war that the world is sleepwalking into is going to wipe out so much chip capacity that the current inflation will look like a blip.
While it's a possibility, do you believe it is likely enough in the very near future to the point where you are betting on it? Perhaps shorting TSMC?
If I did so when I first thought about it, I would be broke by now.
The point to short will be when the Chinese army forms up.
With Ukraine we saw it. It was incredibly obvious. Hilariously the Ukrainians themselves saw the huge army on their border and told everyone it wasn’t going to happen and refused to build any defences. Taiwan will be the same. But the satellites will give everyone enough warning.
> Hilariously the Ukrainians themselves saw the huge army on their border and told everyone it wasn’t going to happen and refused to build any defences.
In terms of gaining political support, being a victim in the modern world is very advantageous. The more of your civilians die unjustly, the more the media will portray you as a great and brave leader. There is nothing hilarious about this, only cynicism of the leaders of the country.
If electronics become too expensive for consumers, wouldn't the demand for AI also go down because consumers cant access it?
I don’t think AI demand is driven by consumers.
Users will have even have more dump devices and will be forced to use remote and cloud services.
This is the biggest memory repricing cycle I've ever seen in my life; some degree of high price/limited availability and "free RAM with purchase of Doritos" cycle is always expected, but this has been the worst one yet.
As other commenters have pointed out but I might have missed in the article, compute maturation is amplifying memory constraints right now and making it worse. Device upgrade cycles are getting longer because most compute-based products have matured, with CPUs not seeing substantial gains and memory usage really only expanding at the absolute top end of workloads pre-LLMs (3D and HPC in particular). An iPhone 14 still has almost all the features of the iPhone 17, because the compute capabilities are remarkably similar; Geekbench shows a performance delta of ~25-30% between the 14 and 17 Pro Max models, which is pretty paltry considering the devices are separated by four years of manufacturing improvements. This extends into desktops, laptops, tablets, STBs, and more, with only VR devices and larger ARM/RISC-based kit seeing more substantial uplifts as general designs improve.
So with compute stagnating and memory constrained, my money is on vendors taking this as an opportunity to gradually shift away from a yearly release cadence and slow down to a biennial cycle that alternates between budget and flagship launches every other year. Even if LLMs fail spectacularly and all that memory capacity becomes available, HBM memory likely isn't to find its way into many consumer devices (just ask AMD how it worked out for them on consumer GCN GPUs).
The name of the game, especially for consumers, is efficiency - "potato builds", as I've been calling them. Software and services optimized for lower power, smaller-specced devices of increasing age instead of pandering to flagship devices with poorly optimized code or engines for the sake of new shinies (like Raytracing). Between the memory shortage, shifting geopolitics, rising costs, and stagnant wages, consumer purchasing power is going to be squeezed like a vice for the foreseeable future, and businesses will need to adapt around that reality.
For example, Apple might make fewer iPhone 18 and let it sell out frequently. They’ll use their RAM supplies mostly for the Pro phones.
I don’t think Apple will stop releasing new iPhone Pros every year. The business is too big.
> For example, Apple might make fewer iPhone 18 and let it sell out frequently. They’ll use their RAM supplies mostly for the Pro phones.
Apple has a second option that may not be open to most other vendors - as they've just demonstrated with the MacBook Neo, they could cut the RAM in half on the budget models. One good cycle of optimising the hell out of their (almost entirely native) software stack, and iOS would once again sing on a 4GB SKU.
I doubt they'd consider that because it's a downgrade. If things get truly desperate, then maybe.
I mean, that's the correct short-term read, but if LLMs in hyperscalers remain commercially viable to the point of tying up memory for several years, and if that necessitates an expansion of memory fabrication to satiate unmet demand, and if that demand ends up getting hoovered up by AI companies again due to their unmet or delayed demand from technological adoption, then Apple et al may not have much of a choice but to adopt such a profound strategy change.
There's a lot of 'ifs' there to be sure, but they'd be fools not to at least discuss the possibility internally and understand their options.
> Even if LLMs fail spectacularly
Haven't they already proven to be extremely useful? In some areas they are definitely here to stay, coding/software and search (retrieve and summarize information). There's a bunch of places where they are surely shoehorned in, overhyped, and don't belong, but there's also equally many places where they might still be transformative but aren't used yet.
But overall I think the technology is well proven.
I always leave room open for failure, and that approach has generally served me well personally and professionally. I have never been punished for having an exit strategy.
Besides, the marketplace is still in its infancy for LLMs, with a lot of unanswered questions. A lot of those questions surround the commercial viability of frontier models on bespoke hyperscaler data centers with limited usage outside of LLMs specifically should those economics be non-viable. Since that's where the memory is being tied up into, that means it's a critical question to answer in order to determine long-term investment needs into further memory fabrication.
Who else thinks that this constraint will force new creative solutions. We got compression algorithms due to limitations.
my 2 cents
I appreciated the detailed breakdown of the memory crunch and how it will affect parts of the industry and consumers. Very good article.
I'm not one of those people who chases all the new great things. I wait until things wear out or become completely obsolete before upgrading. I just get comfortable doing things the same way every day and see no reason to waste money on SaaS shit or anything else wastes my time or money.
I think the memory shortage will present opportunities for those willing to take advantage of the situation. A lot of DRAM is going into GPUs for data centers in AI work. Those units have a limited lifetime online and they will be rotated out and replaced with new units as performance degrades. I think this will be a lot like Li-ion batteries in that many of these GPUs will be perfectly fine for home pcs or small business workstations or for other less intensive use cases and the RAM will be performant enough that a viable recycling industry should arise from this AI buildout.
Funny enough, one day the local AI noise-making, power-wasting, water-wasting data centers will be the best places to score high-tech components and many of us will have one right down the road. That should set a lot of people up as recyclers redistributing reconditioned components to those who build their own systems.
Maybe if we're lucky we get more memory efficient software. ehh who am I kidding.
Last week I spent some extra time on a ticket in order to write a slight refactor that saves some RAM. If I had asked my boss for an extra day to implement this I would have been chastised for not delivering faster.
Thankfully my colleagues saw the value in what I was doing. I smuggled the optimization into my PR with their approval. Anecdotal, but there are still people who care about efficiency out there.
That being said, unless your manager is John Carmack, or you work in embedded systems, time spent on reducing memory footprints is seen as wasteful by the business.
> time spent on reducing memory footprints is seen as wasteful by the business
I think that there is a way to change that.
If an application runs significantly better on lower end hardware while delivering the same results, the customers should prefer it. It is just a matter of promoting it that way.
Yeah, modern software towers of libraries literally eat memory.
MS Teams uses around 1000MB of RAM to do exactly the same things that Microsoft Messenger could do in 8MB.
Might get some ingenious creations from poorer countries, like how in China they mod RTX GPUs to have more RAM because of export controls. Maybe some souped up Xiaomi devices with insane amounts of memory from old donor parts? Custom ROMs/postmarketOS for ultra low end devices that wouldn't normally get them but needed because they're going to need to last a few more years?
I work in healthcare imaging. The DRAM crunch is translating into significant increases in costs - because reconstructing images from raw scans is a compute-itensive process; and that gradually translates into product price increases. And then, healthcare providers may well opt for cheaper, lower-tier medical scanners, since they can't afford the better ones; and then finally you get less accurate scans if you're suspected to have cancer or whatever.
So, that's another way we are financing the LLM machine and the trillion-dollar valuations of those corporate behemoths.
This article expanded my understanding of the memory industry dramatically.
For anyone who doesn’t follow the market closely, this is about a good a primer as you could hope for.
I can't say I've noticed specifically. I have two tracfone accounts and a Cricket account so used to use the Android phone with Cricket after two months - a free phone. But tracfone was bought by Verizon and they being them immediately changed the unlock period from two months to a year. So that to me kills my use case of free smartphones as I don't want to spend any money on phones.
So, if you were wondering how come LLM services are cheap or gratis - now you know another group of people bearing the costs: The poorer half of humanity, who will now not be able to afford a smartphone, i.e. not having access to a computer. Sure, that doesn't kill you, but it is quite significant personally and socially.
At Xiaomi's latest smartphone launch event, Xiaomi founder Lei Jun said that memory prices are likely to keep rising over the next two years, which could drive smartphone prices up as well. His conclusion was pretty direct: everyone should just replace their phones now. Kind of a depressing story.
He could be right, or he could just be a phone company CEO trying to get you to buy a new phone, or he could be both.
Wanted to get Steam Frame VR headset and probably it will be delayed due to this. Sad
But aren't there plenty of used expensive phones from the last 5-7 years that are more or less equivalent replacements for new cheap phones? Apple alone sells 250 million phones a year.
The article takes a while to get there, but it is focusing on a set of companies I hadn't heard of ("Transsion, Oppo, Vivo, and Lava") that buy components from last gen smartphones to make cheap devices to sell in the African and South(/east) Asian markets.
Presumably the supply of 5+ year old used phones that fully work is not enough to meet that demand, which is why these frankenstein Android companies exist.
The deep dive on memory market dynamics and the LLM bubble distortion is great. But another cause of declining smart phone sales is simply that the devices have matured and aren't improving at nearly the same rate.
From 2008 to around 2015, upgrading every two years could make a meaningful difference. From ~2015 to ~2020 upgrading every three years might be worth considering. I just upgraded my top of the line flagship after nearly six years. And I actually looked for compelling reasons to buy a new phone every year since 2023. There just weren't any.
Frankly, this latest flagship phone is pretty underwhelming. It's slightly faster at a few things. The battery lasts a little longer. The screen can get a little brighter. The camera is supposed to a little better. But those are just the claimed improvements. I haven't actually noticed any of them in daily use because they weren't issues with my 2020 flagship phone either. Otherwise, the new phone is almost exactly the same size, same weight, same resolution, same look and same capabilities. I only upgraded because I was long out of contract and it was a only a couple hundred bucks for a $1400 MSRP phone with a new contract and a trade-in of the old phone.
Yeah, I mostly upgraded to get the magnetic charger on the back of my iPhone. Weren't a lot of other compelling reasons - the already pretty great cameras improved a bit, the screen is a bit nicer, but otherwise its much the same slab of glass.
Ever since I started working from home I barely use my phone, I just buy a mid range phone, and it seems just as capable as high range phone in most every practical way. The only real thing that seems a bit better is the camera, but I don't actually use it that often. The only thing I've really been a bit tempted by is Lidar on Apple, but more for dev fun that normal practical purposes.
> The only thing I've really been a bit tempted by is Lidar on Apple
Maybe in that vein, one thing I wish phones would do to differentiate themselves is just add more sensors. I want my phone to be the tricorder from star trek. iPhones should have first party support for generating point clouds and measuring distances using lidar. Their microphones are probably already calibrated, why not expose that as a decibel meter. Same for light sensors. Phones used to have IR emitters, why not add those back in?
Also the iPhone still only has 240fps slow motion, I've found samsung's 960fps really useful in capturing transient phenomenon or even measuring mundane things like LED flicker.
Conversely the Pixel seems to be the only one shipping with an IR thermometer, and they'll probably remove it given most people don't seem to care. That's something I would've found useful in ad-hoc situations where I've had to make do with the back of my hand.
Air quality detection (especially pm2.5, CO2, and CO levels) would be great but I don't know if those sensors can be miniaturized enough to fit.
They're out there. Caterpillar makes a smartphone with a FLIR camera.
I so wanted one of those, but then when I heard about their poor to non-existent software/OS updates, I stayed away. I'll stick with my USB-C FLIR dongle.
That's the problem with non-Google and non-Apple phones.
Yeah I'm still using an iPhone 12 from late 2020 and it's honestly still fine in terms of its processing power, cameras, features etc. for anything I use it for. It does need a new battery but even that has degraded way slower than earlier phones I've had.
I was using an iPad Pro from late 2018 (mostly just for casual web browsing, reading documents and watching video on, I still do all my real work on laptop/desktops) as well until this year, and would have kept using it if I hadn't accidentally dropped it in water. I don't really notice much difference at all between my old one (when it worked) and the new iPad Air I replaced it with, except for the battery being a little better and having a bit more ram being nice (websites in background tabs are less likely to be purged from memory when I come back to them).
First, the iPhone 17 Pro is a huge improvement.
Second, the article doesn’t focus on phones we buy. There won’t be a shortage of those.
Near the end of the article it says:
> We’re already at the point where marginal buyers in the poor world are getting priced out of the smartphone market. We’re rapidly approaching the point where buyers in the rich world feel the same thing.
So it predicts that phones we buy are next.
Improvement in what way and over what previous phone? The parent mentioned a number of metrics.
What does it improve, in practice? For myself, I need my phone to make phone calls, take photos/videos, occasionally run apps, and to be a wifi hotspot. My iPhone 6S did all of these well enough that I only upgraded it recently because I dropped it and bent the power button. My new phone has a slightly nicer camera and better battery life, that’s about it.
I actually also do not find new phones that much of an improvement, but just to be a devil' advocate:
1. High-resolution screen, finally approaching paper (600dpi) 2. High-refresh rate screen, up to 240 fps. Once you see 60 fps, you are already hooked, and 240 is just mind-blowing. 3. High-resolution camera, 50 Mpx means that the camera actually starts to match paper (600dpi) 4. Slo-mo camera (240 fps) to match the screen. 5. Decent memory sizes. On my recent 24 Gb size memory I can actually run multiple apps in parallel, and they are not getting killed. You see, using all available memory is a competitive strategy for app developers -- when they use all the memory, their competitors are evicted from RAM and the user is less likely to receive notifications. 6. Decent sdcard size (1Tb). Same reason for the storage. App manufacturers are trying to use all available space, so that you would delete the competitor's apps in order to keep using theirs. 7. HDMI over USB -- finally you can connect a keyboard and a monitor, and get rid of your laptop, just use one device for everything.
> Once you see 60 fps, you are already hooked, and 240 is just mind-blowing.
I'm a sample size of one, but I'd rather have 20% better battery life (this would extend the life of a three year battery to roughly four years) than eye candy. Extremely aggressively glued-in batteries turning into hazardous gas packages are the only reason I replace portable computers these days.
And -given the history of such things- lack of care in system design means at year two or three, you'd find that your phone very, very inconsistently delivers 240fps. I think it's pretty widely known that once you get to somewhere around 15 or 30 FPS sudden variation in frame rate is far, far more noticeable and unpleasant than rock-solid "low" frame rate. [0]
[0] That is, a 240 FPS system that janks down to 30 FPS every few seconds is gonna be considered much less pleasant to use than one that always runs at 30 FPS.
This is another place where modern capitalism struggles in an area that requires large capital investment producing payoff after years of startup costs, and the buy side is volatile. We've seen this recently with rare earths, copper, and some other minerals. DRAM is almost in the same category.
China has an advantage here, once domestic DRAM production finally gets going. DRAM policy can be set strategically. China's economic planners may choose to provide DRAM to domestic manufacturers rather than export parts, even if exporting parts would be more profitable in the near term. That's already being done in raw materials. Conversely, if external suppliers have lower prices, there may be a policy decision to buy domestically to keep the domestic manufacturers going. Done with the goal of leveling production, this can work. Done stupidly, it becomes a money drain, of course.
Probably China controls the DRAM market around 2030 or so.
Maybe it's time to go back to the time where computers and entertainment were niche and develop efficient resource-constrained devices....
I hate it that we had decades of progress to have computers become a very expensive hobby because some dudes high on fentanyl think some text prediction model that destroys the planet is worth a trillion dollars.
I've been buying a "new" used iphone for $100-150 now, every few years, for over a decade. My "new" used Dell laptop I bought a few months ago for $40 which became a linux system in just an hour. All good here.
I’m really wishing I had overbuilt my NAS last year. As it stands I feel lucky to have even built it at all given I bought all the parts in the last week of September.
My 4090 and 12900k are gonna have to last till 2029 at this rate won’t they…
Won't processors come down in price because people are buying less of them because people are buying less computers because of higher RAM prices?
I've heard that is happening for motherboards.
Processors are currently becoming the next bottleneck on the server component side of things. If consumer SKUs start seeing even less volume than they are today, manufacturers will simply produce more for the datacenter.
Certain popular AMD SKUS are already 120 days lead time and growing. If a vendor will talk to you at all.
I expect motherboards to get cheap until they get to be really expensive niche products should the current situation last a few more years. At least as we know them today as PC enthusiasts and/or prosumers. I could very much see that market evaporating entirely and moving towards large integrators instead. Gamers and such were already a rather small niche to begin with.
Right now the saving grace is a server board doesn’t look a whole lot different than a consumer board. But that may change significantly faster than anyone predicts should current trends with SoCs and the like continue. You may be in a place soon where you get to choose your CPU/RAM/storage at purchase time like you do with a MacBook today.
I’m not gonna build new until I can get a GPU and RAM as well lol. That’s gonna be a few years for sure.
I'm a newborn shill for Ulefone. They come unlocked and the manufacturer supports rooting. The devices are rugged, heavy on features and are (still) reasonably priced.
Pics:https://duckduckgo.com/?ia=images&origin=funnel_home_website...
Two other underappreciated handset brands are Doogee and Blackview. Gorgeous devices and solidly built. From what I recall they're friendly to root.