Thread

1. ocd · 1790861971 · focus · HN ↗

   I'm not a business guy, but I think I would be very worried if I created any opening (even on the very long term) for competition to justify itself being built up to meet demand (or national security requirements of other countries) on an industry I mostly control, because I prioritized extremely high prices for a few years that might have the effect of changing the arithmetic for potential competitors that wouldn't have done it before.

   It makes me consider whether there would be retaliation in later years against the US intellectual property system in countries other than China. While RAM is a tangible product, the areas it serves aren't really.

   1. radford-neal · 1790870747 · focus · HN ↗

      If I understand this comment correctly, it's saying that Micron and the others would be better off selling RAM at below the price they could get, in order to keep competitors from deciding to enter the market.

      Such collusion might well be a violation of anti-trust law, but in any case, it wouldn't work. If they decide to sell at below-market price, they must (by definition) be preventing some customers from buying by some non-price mechanism (eg, only selling to companies run by other members of the CEO's family). Potential competitors would then see an opportunity to sell to these excluded customers.

      1. thayne · 1790872066 · focus · HN ↗

         Not exactly, I think it's saying that Micron would be better off increasing supply themselves (and thus lowering prices) than waiting for a competitor to come and provide more supply to meet the higher demand.

         If there was enough existing competition, that might be the right move, because if they don't increase capacity, a competitor probably would in order to gain more market share. But I think the barrier of entry for making RAM is high enough that Micron can probably get away with keeping supply low (and thus prices high) for at least a few years before a new competitor appears. Assuming demand stays high that long.

         1. tzs · 1790872887 · focus · HN ↗

            They aren't keeping supply low.

            They have two massive DRAM fabs (56000 m^2 cleanroom size each) that they started construction on in 2022 and 2023 in Idaho, with production starting in 2027 and 2028.

            1. fakedang · 1790880890 · focus · HN ↗

               The point they were stating was that if they kept up the high prices, that leaves room for a low priced competitor, likely from China, to occupy the lower end (and larger) share of the market. Like what BYD did to the EV market everywhere except the US. Or what Chinese mobiles did to the smartphone market. Eventually they become so powerful that they start going upmarket, trying to catch everyone in the higher end segments too. And by the time the Western companies think they can retaliate, too bad, China's got them by the bollocks on raw material.

               1. mcmcmc · 1790890965 · focus · HN ↗

                  Lowering their prices would result in supply running out sooner. Their competitors would still get the same bite at the apple but would have a longer window where they are the only option. Or resellers would just arbitrage the surplus left on the table.

                  1. m4rtink · 1790925179 · focus · HN ↗

                     Its not about lowering their prices - they shouldn't have abandoned their regular long term customers (e.g. normal people) to just chase AI fever drem money bullshit.

                     They would still make a lot of money but without making a lot of bad blood & making a massive opening for chinese competition.

                     But greed is greed...

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