mrgraff
macrumors 65816
I saw "Macron" for a second and thought this was another EU regulations story!
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Micron Suggests Apple Helped Cause Memory Price Crisis
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JosephAW
macrumors 604
How much are those new ultraviolet 3-D printing memory chip systems cost these days? Maybe it’s time for Apple to bring one in the house. 🙄💰
Obviously memory shortage scarcity is partially man-made.
Obviously memory shortage scarcity is partially man-made.
maflynn
macrumors Broadwell
Googling this, I see that it could between $15 billion and $20 billion and it will take about 5 years (not including all the permitting).
I don't think that will happen, the question would be, how long would it take apple to recoup the costs to get one of those plants up and running and secondly will one plant be sufficient to supply all of apple's needs
I have no clue on those items, but will say, that what looks easy to us sitting on the sidelines frequently is not.
“Cook said Apple had been trying to shield customers from the worst of it but had reached a breaking point”
LOL. Apple has a long history of absolutely hosing customers on storage upgrades, apparently while also strong-arming the suppliers.
LOL. Apple has a long history of absolutely hosing customers on storage upgrades, apparently while also strong-arming the suppliers.
Hajj.david
Suspended
Last quarter alone Apple gave away close to 5 billion in dividends. Put it towards the foundry...
Hajj.david
Suspended
Yet Tim Cook last quarter was bragging about 150,000,000,000 in revenue and a 16% increase. "Breaking point" my buttocks.
Apple's MO during the Cook era is to invest in the companies that make the commodity parts Apple needs in exchange for favorable pricing. Apple's not going to spend billions on chip plants that will eventually become obsolete and are at the mercy of memory boom-bust cycles, especially if it's going to take at least 3 years to build one.
tl;dr everyone sucks. Businesses have their heads so far up their butt they forgot that they have to sell products to customers and that customers need money to buy these products. The economy is a system, and they'd rather play office and feed their egos rather than build real businesses.
The customer is likely screwed because the first domino has fallen. Micron has made agreements with 16 corporations for memory supply (at significantly higher prices) for the next five years, and it is likely that SK-Hynix and Samsung will be next.
Those costs, certainly and absolutely, will be passed on to us until at least 2031.
The only chance for market relief will be if Chinese corporations can scale to the level of worldwide memory sales. Even if there is will and intent, however, that will take years to scale, and that memory may be desired by China's leadership to fuel their own national hyper-scaling!
Those costs, certainly and absolutely, will be passed on to us until at least 2031.
The only chance for market relief will be if Chinese corporations can scale to the level of worldwide memory sales. Even if there is will and intent, however, that will take years to scale, and that memory may be desired by China's leadership to fuel their own national hyper-scaling!
zarmanto
macrumors 65816
I do not take issue with the accuracy of this statement... only with the contextualization. Out of context, this makes Apple sound unequivocally like the "bad guy." The proper context, though, would need to include a comparison with other companies who provide truly comparable* hardware products to what Apple sells... where you will quickly discover that they're all essentially "bad guys."
* "Truly comparable" means a fully assembled solution; "beige box" build-your-own-box computers are decidedly not what I'm talking about, here.
maxoakland
macrumors 68000
Oh no! Anyway, Apple products cost a ton more now partially thanks to Apple’s shortsighted greed. That same shortsighted greed could cause them a lot of problems now that they’re price gouging their own customers rather than their suppliers. All to maintain ridiculously bloated margins
Apple won't do it. Such a foundry would be too expensive! They will not make that kind of risky adventure;
However, they have engaged in $310 billion in stock buy-backs over the last 15 years. Yes, I see the glaring contradictions, too.
Above and beyond boycotting, what does an individual consumer do? Become a Luddite? 🤷♂️
maxoakland
macrumors 68000
maflynn
macrumors Broadwell
Investors are their priority. It won't happen.
maxoakland
macrumors 68000
I don’t know if I agree with that. It could’ve been a smart investment since it’s pretty obvious a memory slump wouldn’t last forever and it could’ve positioned them to take advantage of the eventual upturn. Even if no one knew how big that upturn would be
I've been waiting for the Ai bubble to pop, but since everyone is leveraging themselves to hell with it, I don't see it popping anytime soon. Everyone is just predicting upward trajectory on memory/storage costs for the next 5 years.
Exactly, it's trillions of dollars of circular investing and the public will have to eat it all with multiple bailouts when it comes crashing down. So much of the stock market and so called economy growth is all tied to this.
What's disgusting is that the memory manufacturers have learned from post-covid car manufacturers/dealerships. Why overbuild/overstock and have to lower prices to make sales, when you can purposely limit production and jack prices to the stratosphere so only the very rich corpos can afford your products. Samsung/Hynix is handing out almost million dollar bonuses this year to all their memory industry employees.
Do you not understand the article?
Let me simplify that for you - Apple (and some others) squeezed the company so much that the company didn't have available funds for early expansion which would minimise the impact we are having now. As such, all got shifted which is why we will have this issue for another year or 2 minimum.
If Micron had the same margin as Apple then this would all likely be avoided as the increase would be gradual and therefore the market would be way healthier.
This is what Monopoly looks like and Apple is well known to squeeze the little guy to the last drop - its been well documented over the years.
So now, we all have worse situation and I hope that Micron will have a revenge and treats Apple the same way they treated them back then.
Let me simplify that for you - Apple (and some others) squeezed the company so much that the company didn't have available funds for early expansion which would minimise the impact we are having now. As such, all got shifted which is why we will have this issue for another year or 2 minimum.
If Micron had the same margin as Apple then this would all likely be avoided as the increase would be gradual and therefore the market would be way healthier.
This is what Monopoly looks like and Apple is well known to squeeze the little guy to the last drop - its been well documented over the years.
So now, we all have worse situation and I hope that Micron will have a revenge and treats Apple the same way they treated them back then.
Micron blames capitalist supply/demand and barter based economy things on supply/demand and barter based economy things? I get that Apple has/had a lot of sway at the negotiating table, but negotiations are two sided. Realistically, where was Apple going to go if Micron pushed back on prices? It's not like there was an abundance of RAM suppliers before AI. It's how we got into this mess in the first place... [EDIT] After more careful reading, I was wrong about this. Apple was negotiating during a down cycle in the market so Micron was facing accepting Apple's low ball offer, or having fabs sitting idle and Apple going to Samsung or Hynix... I don't call that bad business practices, I call that Apple taking advantage of market conditions and stocking up when prices were already low. If Micron felt strongly enough that Hynix or Samnsung would have taken the same deal that they accepted it... I don't see how that makes Apple the bad guy.
In the statement Tim Cook gave warning about the price increases he pretty clearly stated Apple doesn't want to be in that business anyway. If it was a long term viable thing to do, you'd think you's see major investors, or even companies like Apple and Google partnering to invest to build capacity in the US and other places... they must see the demand capping out at some point.
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They have massive cash reserves. Don't kid yourself into thinking they would be more competitive with lower pricing if they manufactured more in house. If they wanted to gain market share they would absorb the increases, they have more than enough to do so without batting an eye.
It's profit above all else.
macMD
macrumors 6502
When was the last time a company planned to dump cap ex to expand production during an economic downturn especially in the volatile market of memoruly chips. Apple has rhe buying power to dictate better pricing, and the memory companies could have held firm and said no.
They were not spending or planning to spend billions for more chip fabs unless they could maximize profits. Now AI comes along and that memory generates far higher profit margins so they shifted production that way. It’s not like Apple and others are going to s op buying, but now they can charge more and make even more profits.
This is just like big oil, they bitch and loan about low oil prices so they don’t build capacity and tell the govt they need help. But when oil jumps up they still don’t build capacity because they can just charge more.
There is no incentive to do anything because politicians will throw cash at companies and stick taxpayers with the bill.
They were not spending or planning to spend billions for more chip fabs unless they could maximize profits. Now AI comes along and that memory generates far higher profit margins so they shifted production that way. It’s not like Apple and others are going to s op buying, but now they can charge more and make even more profits.
This is just like big oil, they bitch and loan about low oil prices so they don’t build capacity and tell the govt they need help. But when oil jumps up they still don’t build capacity because they can just charge more.
There is no incentive to do anything because politicians will throw cash at companies and stick taxpayers with the bill.
Not very accurate. The problem was the multiyear agreement that provided very low margin to Micro and others.
Imagine if all suppliers to Apple would held firm and kept the same margin as Apple. (around 40%).
Apple ram upgrades were priced like that before. each tier was $250 or so and yet you could get the same online for roughly $30.
So if all suppliers had healthy margins then this situation would be so bad right now as the ramp up was gradual and therefore the companies would react faster as they would have the budget for expansions. Its only now they are reacting as the terms have changed.
Imagine if all suppliers to Apple would held firm and kept the same margin as Apple. (around 40%).
Apple ram upgrades were priced like that before. each tier was $250 or so and yet you could get the same online for roughly $30.
So if all suppliers had healthy margins then this situation would be so bad right now as the ramp up was gradual and therefore the companies would react faster as they would have the budget for expansions. Its only now they are reacting as the terms have changed.