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  • shabby - Friday, April 26, 2019 - link

    Do they really think people will buy if the price goes up?
  • smilingcrow - Friday, April 26, 2019 - link

    Looking at what people have paid for GPUs and RAM over the last 2 years will give you an idea.
  • willis936 - Friday, April 26, 2019 - link

    There is a negative correlation between GPU price and how much consumers spend on GPUs. So no, increasing price is not a good strategy.

    https://www.statista.com/chart/15843/nvidia-and-ra...
    https://www.statista.com/chart/17089/nvidia-revenu...
  • Opencg - Friday, April 26, 2019 - link

    it was show to be negative recently due to the price difference within a few month time period. when 10 series were overstocked the 1080 ti was 500. vs the similar performance 2080 for 800. however people still buy the cards and now that the deals have been crap for the past 6 months (outside of used) the profit is still comming in from these poorly priced cards.

    if price on nand flash goes up you can expect a couple months of lower sales then back to normal profit levels. its really complicated because economy of scale and perhaps one producer decideds to undercut but consumers overall are seeing good deals right now on these products so i would expect a slight swing backwards next year
  • Solandri - Friday, April 26, 2019 - link

    GPU prices haven't actually increased. Their price has tracked pretty closely with inflation. The only real blip is that Nvidia introduced the Titan as a high-price, high-performance, low-volume bragging rights product, where no similar product existed in the past.

    https://hexus.net/tech/news/graphics/103399-inflat...

    The historical time constant for NAND price cycles has been about 1-2 years. The current price slide began around 3Q of last year. So we more than likely have another quarter or two of price drops before it stabilizes. It could be shorter or longer though - you can never be sure.

    https://static.seekingalpha.com/uploads/2017/9/24/...
  • f4tali - Saturday, April 27, 2019 - link

    "The greatest trick the Devil ever pulled was convincing the world he didn’t exist."

    Nvidia outsmarted a lot of smart people with a supersly move:

    Nowadays a 1080 is a 104 chip and even a Titan (10 series) only a 102.

    Whoever Mark Tyson is.... he's wrong (sorry).
  • f4tali - Saturday, April 27, 2019 - link

    IOW GPU prices have more than DOUBLED since the 500 series...
  • f4tali - Saturday, April 27, 2019 - link

    In other OTHER words would you rather pay $554.93 for 520mm squared or $1200 for only 471mm squared?

    And yes, that's a rhetorical question :P
  • LordSojar - Saturday, April 27, 2019 - link

    Wafer size plays into pricing, no doubt.

    But it's not that simple. nVidia has sheer architectual superiority right now, and that shows with a 12nm (aka 16nm with improvements) chip outperforming a 7nm (a true generational improvement from 16nm+++), despite the size.

    Yes, the sizing is influencing price, as is greed... but sheer R&D costs of these chips is absurd. To shift technology as nVidia and MSFT are doing requires you to be big and spend a LOT of money.
  • HStewart - Sunday, April 28, 2019 - link

    Wafer size does mean smaller nm means cheaper but because of cost of manufacturing is so much more expensive when it gets smaller and not guarantee that same size wafer means more chips.

    If you look at cost to create new Fab's for chips - NVidia and MSFT prices is probably just a tip of Iceburg

    But one thing is the nm size does not mean performance. It takes the right architexture below it to make it happen. But architexture changes cost more R&D in some ways because it requires new ways of thinking.
  • Korguz - Monday, April 29, 2019 - link

    BTW HStewart.. it's architecture NOT architecture :-)
  • Korguz - Monday, April 29, 2019 - link

    grrr it's architecture NOT architexture

    need that edit button AT :-)
  • piroroadkill - Monday, April 29, 2019 - link

    You've just countered your own point with that Hexus article: from the GTX 285 to the 1080 Ti, there's a constant price increase. Not to mention the 2080 Ti.
  • HStewart - Sunday, April 28, 2019 - link

    This is because GPU know now that gamers and such always want the latest and greatest. Also more memory and more cores when most don't need it.
  • HStewart - Sunday, April 28, 2019 - link

    I think GPU's are because of type of market it - most people and that is 75% + don't need high end GPU's - Gamers and also 3d artists are the main market.

    Plus now a days most people are going Mobile with laptop and some even using iPad's and such. So most of time memory and even storage is fixed.
  • The_Assimilator - Friday, April 26, 2019 - link

    You say that like people have a choice.
  • shabby - Friday, April 26, 2019 - link

    Yes we do, nand isn't a necessity in life.
  • tamalero - Friday, April 26, 2019 - link

    Thats an idiotic argument. If nand is in every piece of technology and technology runs the world. of course you need it. Directly or indirectly.
  • SL4KR - Saturday, April 27, 2019 - link

    How is it not?
  • defaultluser - Friday, April 26, 2019 - link

    No, but cutting production will prevent prices from falling further. Commodities like memory and Flash will always suffer form boom/bust, but your management will determine just how far into the hole you go during the bust.
  • haukionkannel - Saturday, April 27, 2019 - link

    The prices will come up when Intel gets its 10nm rollin at the third quarter... Many people Are waiting for Ryzen2 and Intel cpu shortage to end. At that moment the ram and nand prices will skyrocket again!
  • bobhumplick - Friday, April 26, 2019 - link

    this is a trick. they know sales are down on the oem side because intel cant meet demand. core count increases and discounts (in response to epic) means for the first time in forever its worth upgrading servers in large numbers.

    on the diy market people are waiting for amd's next gen (intels too, with 8 core 16 thread i7's coming) and amd's new gpus. people are waiting for summer.

    they know this is a good reason to cut back supply without getting labeled as price fixing. but they know demand is gonna spike soon.

    the problem with nand wasnt as bad as dram. but the current prices on nand should hold. not go up. dram should still drop another 10% at least.

    they got to used to all that free money. samsung earnings dropped 60%? dram prices dropped 40-50%. id say its about time and it needs to drop further. i mean high end ram didnt drop that much at all, if any
  • zanon - Saturday, April 27, 2019 - link

    Many people will certainly buy, duh. After all, prices have plummeted in the last 5 years, yet people were buying 5 years ago too. Sure, the total number of units sold might drop but the absolutely number of people buying isn't something they care about. What matters is the profit margin, units x margin per unit. For example, do you think raising prices to go from a 1% margin to a 10% margin would cause the number of units sold to fall by a factor of 10x? Because if not and if they have no other reason to go for share in and of itself it'd be foolish not to do so.
  • Alexvrb - Saturday, April 27, 2019 - link

    They probably won't go up much, but I anticipate price per GB will stagnate again for a while. Sigh.
  • PeachNCream - Friday, April 26, 2019 - link

    In the absence of any easy-to-blame natural disasters, NAND suppliers are forced to simply scale back production to drive prices back into the ceiling in a "clearly not coordinated" action that multiple major suppliers all happened to take at the exact same time in order to engineer a shortage. Oh and we'll have a typhoon, earthquake, or tidal wave to blame later probably.
  • FunBunny2 - Friday, April 26, 2019 - link

    monopolists always know best. just ask any business critter.
  • voicequal - Thursday, May 2, 2019 - link

    Would you do any differently? High prices incentive investment in new tech and production capacity. Not surprising that falling prices have the opposite effect.
  • surt - Friday, April 26, 2019 - link

    "follow the suite." -> follow suit. It's a metaphor derived from the card game bridge.
    (in bridge, whist, and other card games) play a card of the suit led.
    as a metaphor: conform to another's actions.
  • PeachNCream - Friday, April 26, 2019 - link

    And "...smartphone replacement cycle are increasing..." should probably read "..smartphone replacement cycles are increasing..."
  • surt - Friday, April 26, 2019 - link

    Lengthening might be even better.
  • khanikun - Monday, April 29, 2019 - link

    Lengthening is definitely more appropriate imo. Increasing sounds like people are replacing their smartphones more often. 1 replacement cycle a year, 2 replacement cycles a year, 3 replacement cycles a year, etc. That's increasing.

    1 replacement cycle a year, 1 replacement cycle every 1 1/2 years, 1 replacement cycle every 2 years, etc. That'd be lengthening.

    Course increasing can be read as both.
  • wrkingclass_hero - Friday, April 26, 2019 - link

    This is such bullshit that the NAND suppliers can openly collude to manipulate supply and demand, if our legal system wasn't broken and corrupt they would suffer crippling punishments for price fixing and collusion.
  • Solandri - Friday, April 26, 2019 - link

    During the lows of the bust cycles, these companies sell NAND below their production costs. (Read up about sunk costs if you don't understand why a business would do that.) You seriously expect them to continue selling things for less than it costs to make them without reducing production? Companies which do that don't stay in business for long.

    From having run a business, what I've learned is that price drops are initiated by the store - if inventory is piling up, you have to drop your prices to clear it out. Price increases are initiated by the customers - if you can't keep stuff in stock and people still want it, they will buy it from someone else who still has stock because they priced it higher than you did.
  • sonny73n - Saturday, April 27, 2019 - link

    I was planning to upgrade my system RAM from 8GB until I read your bullshit analogy. NO companies sell products below their production costs, unless they’re going out of business. There are many things in stores that are oversupplied such as food or clothings or tools but you don’t see them cutting down productions to increase demands, do you? You have the right to cut down your own production but shaking hands with other companies so you all can manipulate the market is just down right crooked.

    Because our politicians have minds like yours, our legal system is broken and corrupt. What I can do is restrain myself from buying what I don’t really need and advice everyone around me to do the same. Mind telling me what business you’re running?
  • Kristian Vättö - Saturday, April 27, 2019 - link

    Look up Intel's earnings from this week. Their memory division made a $300M loss with $900M revenue.
  • FunBunny2 - Sunday, April 28, 2019 - link

    any accountant who can't shift costs intra-compnay/inter-division in order to support the CxO story won't stay employed.
  • Tams80 - Saturday, April 27, 2019 - link

    Pretty much any business does control supply according to demand. They wouldn't be in business otherwise.
    Laws are there to prevent this to an excessive degree, not prevent it entirely. When businesses failt to control their supply well, you end up with governments having to step in (see the food mountains and drink lakes that happened in the EU).
  • Solandri - Sunday, April 28, 2019 - link

    Since you obviously didn't look up "sunk costs" here's an anecdote to illustrate what happens when you refuse to sell below cost. I had a manager who thought like you did. He ordered a batch of 80286 laptops for resale. 6 months later 80386 laptops became available. I and many others advised him to cut the price on the 80286 laptops. He insisted we shouldn't drop the selling price below what we paid. We tried to explain sunk costs to him, but he was adamant. 2 years later, 80486 laptops were available at a lower price than his 80286 laptops. Instead of losing a couple hundred thousand dollars by selling the 80286 laptops below cost, we ended up losing a million dollars because of all those unsold laptops were now obsolete and unsellable.
  • khanikun - Monday, April 29, 2019 - link

    Actually a lot of companies sell products below production costs. As long as they can make it up in another fashion. Consoles is one such product that is usually sold at less than production cost, as they can make their money back through their online stores, licensing fees, online services, etc.

    Google pretty much gives away all their products. How many millions or billions of dollars do you think they spend to make their software?

    It's actually fairly common in the tech world, as costs are made back in another fashion. It's harder to make back money in another fashion, when you might only make that one product. You're also comparing the tech world to food, clothing, or tools. Where one has much higher R&D costs and factory costs. I can't think of any other industry that spends $20 billion to make a single factory.
  • brakdoo - Friday, April 26, 2019 - link

    WTF? Do your homework man:

    Micron announced reduced bit output both DRAM and NAND FY19 Q1 earnings call in december: "Taking actions to lower our NAND output and now expect our
    NAND bit shipment growth to be ~35%"
    Those Q2 actions are just additional...

    Samsung reduced expectations for 19 back in Q4 18: "And for NAND flash, the annual demand growth is expected to be mid-30s. And again, our bit growth will be in line with that of the market."
  • Anton Shilov - Friday, April 26, 2019 - link

    The framework of the story was limited to Q1, when prices of NAND memory decreased by 20%. They predicted one thing, turns out it was inaccurate and they have to respond somehow.
  • brakdoo - Sunday, April 28, 2019 - link

    Well, i can read and you should read your first paragraph too. The scope is clearly about the "very profitable boom year in 2018" coming to an end and the companies reaction by reducing output..

    And when you talk about micron and say "The company did not indicate plans to shrink its NAND bit supply" then you must be crazy if you knew that they did that exactly one quarter earlier...

    Also, WDC reduced wafer starts in FY 19 Q1 that will reduce bit output starting FY Q3 (march quarter 19).

    AT claims to be "better" than other sites but you are not too far away from wccftech...
  • Alistair - Friday, April 26, 2019 - link

    The Xbox 360 to Xbox One went from 256MB to 8GB memory. 32 times more for the same price. A 20 percent decrease in price in nothing, since it gets cheaper to make the same capacity. We need a huge crash, with all ram prices dropping by 50 percent at least, to be even close to having half the progress of the previous 7 years.
  • Stochastic - Friday, April 26, 2019 - link

    The 360 had 512 MB of GDDR3, but yeah...the jump in memory size last generation was massive. The big jump with the upcoming gen is going to be with the CPU (Jaguar to Zen 2 cores) and storage (5200 RPM hard drives to blazing fast SSDs).
  • Tams80 - Saturday, April 27, 2019 - link

    We need these companies to stay in business, otherwise there will be no one to make the NAND, let alone develop new NAND.
  • coburn_c - Saturday, April 27, 2019 - link

    Oh boy. Idling supply to inflate prices is bad economics. You do pass some costs off onto power distribution and manpower, but your ROI on equipment investment suffers. Why not just try to move more units at a lower margin? This is bad economics. Fucking China.
  • edzieba - Saturday, April 27, 2019 - link

    Because negative margin loses you money, and there are per-wafer costs as well as setup costs.

    This is how demand scaling operates across all manufacturing and how it has done for longer than IC production has existed. The NAND market alone has gone through this cycle many, many times. Waiting of armchair economists is not going to change for industry operates.
  • FunBunny2 - Saturday, April 27, 2019 - link

    "This is how demand scaling operates across all manufacturing and how it has done for longer than IC production has existed. "

    oddly, of course, econs say price is driven by marginal cost (materials, labor, mostly), while the MBA class say it's average cost (materials, labor, all fixed cost). it's that last the messes things up. IC production is largely fixed cost, since the buildings and machines are being amortized. the only way to do that, and keep average cost under control is to *increase* production. but you can only get away with that if there's also *increasing demand* for your product. since ICs are just intermediate goods in some consumer product, the IC vendor is in a bind with regard to demand. a rock and a hard place. by driving up the cost to the consumer product vendor they end up hurting demand for that product. the IC vendor's average cost goes up, compelling it to raise price further. what's that snake that eats it's tale?
  • eastcoast_pete - Saturday, April 27, 2019 - link

    I really hope that at least one of the agencies charged with ensuring real competition will launch an investigation into price-fixing by this trio of market-dominating memory makers. This almost perfect synchrony of production cuts has the strong smell of illegal coordination with the intent to manipulate the NAND market attached to it.
  • FunBunny2 - Saturday, April 27, 2019 - link

    "I really hope that at least one of the agencies charged with ensuring real competition will launch an investigation into price-fixing by this trio of market-dominating memory makers."

    with regulatory capture in the USofA at a level not seen since Harding, good luck with that.
  • djayjp - Saturday, April 27, 2019 - link

    Isn't this illegal?
  • Tams80 - Saturday, April 27, 2019 - link

    If they're not colluding? No. If yes, then yes.
  • djayjp - Sunday, April 28, 2019 - link

    The article pretty clearly says that they are.
  • Adramtech - Monday, April 29, 2019 - link

    they all are on a collision course with losing money, what do you do?
  • khanikun - Monday, April 29, 2019 - link

    The article doesn't clearly state they are colluding. All I'm seeing is supply and demand. No one wants to buy stuff they don't need and no one wants to make stuff they can't sell.

    That's not to say they aren't, but this article isn't a clear indicator that they are. All we're getting is that two companies are dropping production of old tech, while one of them is increasing production of new tech. One is cutting production of nand, but doesn't say how and other simply isn't saying anything.

    The article doesn't even say they are tackling the oversupply problem.

    "Just like Micron, SK Hynix does not seem to have plans to lower its NAND bit production, so it will still more memory than it did last year."
  • ballsystemlord - Saturday, April 27, 2019 - link

    Spelling/Grammar corrections:
    "SK Hynix does not seem to have plans to lower its NAND bit production, so it will still more memory than it did last year."
    Missing word "have":
    "SK Hynix does not seem to have plans to lower its NAND bit production, so it will still have more memory than it did last year."

    "Furthermore it is highly likely thr another major manufacturer, Samsung, will follow suit."
    Misspelled word "that":
    "Furthermore, it is highly likely that another major manufacturer, Samsung, will follow suit."

    Thanks for the warning!
  • snarfbot - Sunday, June 2, 2019 - link

    and in a few years well read about how they were engaging in price fixing, obviously in front of our faces.

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