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Comment by franga2000 | Hacker News Reader

franga2000

> The people who really need the chips, and would be willing to pay a lot more than $X for them

The people who really want the chips, and are able to pay a lot more than $X for them.

Please can y'all stop pretending that raising prices allocates resources by need and willingness to pay? With the level of spending power imbalance, the person who wants something and has too much money will ALWAYS squeeze out the people who actually need something and have less money. Always. No other factors are considered by the market.

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The cure for high prices is high prices. Selling out creates scalpers and sometimes even a speculative bubble. High prices means producers invest in new fabs (though it may take time).

>though it may take time

That’s what makes this so distinct so it probably shouldn’t just be some offhand parenthetical at the end. It’s incredibly expensive, it takes a long time, and it’s incredibly specialized. You can absolutely forget the idea of a “disruptive startup” entering that space too.

Maybe not a traditional disruptive startup but isn’t CXMT from China stepping in to build all those fabs?

Previously investing in that space didn’t make a lot of sense. Now that there are a lot of consumers willing to buy something they can build and sell at a price between the previous low point and the current high point.

The only tricky thing is that the current shortages need to continue until the fans are well up and running.

Even if the supply side suddenly crashes due to the AI bubble bursting or someone inventing a way to only need 1/10 of RAM, I can imagine them keeping the prices relatively high.

It takes several years to get production and distribution started. You’re not going to see a rush chasing current consumer ram prices like you would a popular toy or something.

Distribution is already mostly in place. The existing channels have run dry so they can be filled with the new supply.

Building things happens a bit quicker in PRC compared to the US. If they see it as a way to undercut the US/Taiwan hegemony on the chip markets, it might even just fun to do it.

HBM3E is something China can’t do yet. And their DDR5 17nm node process just cleared high yield rates 2 days ago. It will be interesting to see what happens here.

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