Samsung and SK Hynix halt expansion plans to prevent SSD and memory price drop

[Drak3]

Just now, Misanthrope said:

Did you not understand that the point of this plan is to stay ahead of the "natural market forces" in order to manipulate them?

The plan is to not bury themselves in stock that they might not be able to sell. DDR5 is slated as early as next year. They're already building an overstock. Demand has already started to fall. They're not staying ahead of natural market forces, they're reacting to them.

[spartaman64]

wasnt there a huge memory shortage? what is there randomly a surplus now?

https://www.extremetech.com/computing/263031-ram-prices-roof-stuck-way

[dizmo]

7 hours ago, bbbbbbb99 said:

Theres a slump in demand for nand so why is dram getting affected? If its anything but pricefixing

They're made from the same wafer, are they not? It's wafer production they're cutting back on, which affects the aforementioned items. 

[Drak3]

7 hours ago, spartaman64 said:

wasnt there a huge memory shortage? what is there randomly a surplus now?

Phone and laptop sales aren't near as high as they expected.

[Doobeedoo]

Come on now seriously. It's good seeing SSDs droping in price with a steady rate. It would really be lame to see them go higher and even stay like that for longer. 

Also RAM prices ugh needs to drop! 

[Okjoek]

Too bad they can't just flood the markets with them like some kind of AK-47. Cheap fast storage for everyone \o/.

[Brooksie359]

20 hours ago, Wh0_Am_1 said:

Price fixing is an occurrence in which two or more companies arbitrarily agree to increase the prices of their products to make a quick buck, this such phenomena tend to be rare in capitalist markets due to the significant risk of the included companies breaking the agreement and stealing the others market share, and third parties  selling their products at reasonable prices thereby stealing the other companies marketshare, price fixing is almost always a foolish idea in capitalist markets due to the damage that occurs to the involved parties reputations, and the loss of marketshare, it is almost always a tactic that only works in the short term but usually causes irreparable damage in the long term.

Prices of dram used to be 80 bucks for 16 gb of ram. Now it's going back to that of what it was prior to the ram shortage and you think they need to decrease the supply? There is plenty of demand and they would still sell it all if they priced it like it was before all this shortage bullshit happened. If it price fixing is really dependant on if the lowering of supply is justified which I don't believe it is. "Illegal price fixing occurs whenever two or more competitors agree to take actions that have the effect of raising, lowering or stabilizing the price of any product or service without any legitimate justification. " that is what the FTC defines price fixing as. 

[Wh0_Am_1]

1 hour ago, Brooksie359 said:

Prices of dram used to be 80 bucks for 16 gb of ram. Now it's going back to that of what it was prior to the ram shortage and you think they need to decrease the supply? There is plenty of demand and they would still sell it all if they priced it like it was before all this shortage bullshit happened. If it price fixing is really dependant on if the lowering of supply is justified which I don't believe it is. "Illegal price fixing occurs whenever two or more competitors agree to take actions that have the effect of raising, lowering or stabilizing the price of any product or service without any legitimate justification. " that is what the FTC defines price fixing as. 

Once again there is a slump in demand, does that not make for a legitimate cause to reduce production, and if you not most of the current "demand" is from tire kickers who want the product, but are not willing to pay the price for it.

[Guest]

21 hours ago, S w a t s o n said:

>RAM prices inflated
>because of fab fire and general DRAM undersupply

 

>fabs now cutting expansion
>NAND/DRAM oversupply but RAM is still pretty expense

u fuckin wot m8?

 

this is not matching demand to supply this is artificially manipulating the market to maintain margins

Theres probably an oversupply because no one wants to buy overprices RAM in the first place.

[JoeCoke]

45 minutes ago, RorzNZ said:

Theres probably an oversupply because no one wants to buy overprices RAM in the first place.

This is exactly what I was about to say. I paid 64$ for my 16GB HyperX Fury DDR3 kit a few years ago...

[rawrdaysgoby]

Well since this is happening Everyone should really stock up before the prices goes up again

[mr moose]

2 hours ago, Brooksie359 said:

 "Illegal price fixing occurs whenever two or more competitors agree to take actions that have the effect of raising, lowering or stabilizing the price of any product or service without any legitimate justification. " that is what the FTC defines price fixing as. 

This sentence means they have to be in collusion, not just doing the same thing at the same time.   A drop in demand is sufficient cause for reducing supply on it's own.  For this to be price fixing you'd have to prove all the stock orders being lower were artificial (which means auditing every single buyer) and then you would have to prove they actively agreed with each other to this action.

[Drak3]

4 hours ago, valdyrgramr said:

One one hand, you had the makers claiming a shortage and trying to convince everyone of a shortage.  On the other hand, you had several governments, even China, calling them out on their BS.  Now, the reason I said China was because they're doing a huge international investigation on that.

It's more like this:

More and more products are using more and more NAND.

Manufacturers couldn't keep up with demand. Few accidents happen.

 

People cry wolf.

 

Countries decide to look into it and still haven't found proof of price fixing.

[Brooksie359]

8 hours ago, mr moose said:

This sentence means they have to be in collusion, not just doing the same thing at the same time.   A drop in demand is sufficient cause for reducing supply on it's own.  For this to be price fixing you'd have to prove all the stock orders being lower were artificial (which means auditing every single buyer) and then you would have to prove they actively agreed with each other to this action.

Which is exactly what I was implying. 

[Master Disaster]

On 07/09/2018 at 11:57 PM, dizmo said:

This isn't price fixing, this is matching supply to demand. You don't make 1,000 Big Mac's if only 100 people want them, and then lower the price so that people buy them simply because they're so cheap. That doesn't make good business sense at all, and it's rather shameful that you'd accuse them of that.

Maybe if you understand how corporations work...

 

@Wh0_Am_1 A valiant effort, but I'd honestly save your breath. You won't get through or convince them that they're wrong. They're mostly children that only want lower prices, and don't understand how a business functions.

Might be true if both companies hadn't already been fined for collusion and price fixing. IIRC they're both under investigation a second time right now for the exact same thing.

 

They're not adjusting to match demand, they're adjusting to maintain profit. DRAM is still in huge demand however nobody is buying it because its so expensive. They're basically trying to offset the falling price of SSDs in the exact same way they've done for RAM.

[Sakkura]

On 8/9/2018 at 1:01 AM, S w a t s o n said:

>RAM prices inflated
>because of fab fire and general DRAM undersupply

 

>fabs now cutting expansion
>NAND/DRAM oversupply but RAM is still pretty expense

u fuckin wot m8?

 

this is not matching demand to supply this is artificially manipulating the market to maintain margins

What fab fire?

[Sakkura]

On 8/9/2018 at 6:21 AM, bbbbbbb99 said:

Theres a slump in demand for nand so why is dram getting affected? If its anything but pricefixing

NAND and DRAM production are different, but not that different. It's possible to convert a fab between NAND and DRAM production, so price development in one area is affected by developments in the other.

On 8/9/2018 at 6:46 AM, spartaman64 said:

wasnt there a huge memory shortage? what is there randomly a surplus now?

https://www.extremetech.com/computing/263031-ram-prices-roof-stuck-way

There was a shortage, and now it's ending. The memory market has historically had a cyclical tendency, going from undersupply to oversupply and back again.

17 hours ago, valdyrgramr said:

That was debatable.  One one hand, you had the makers claiming a shortage and trying to convince everyone of a shortage.  On the other hand, you had several governments, even China, calling them out on their BS.  Now, the reason I said China was because they're doing a huge international investigation on that.

The shortage was not debatable, it was factual. The question is whether the shortage was the natural result of rational competition, or manufacturers deciding not to compete as aggressively as they could have (by not expanding manufacturing capacity in the face of rapidly rising demand).

[S w a t s o n]

2 hours ago, Sakkura said:

What fab fire?

https://www.theguardian.com/business/2013/sep/06/china-fire-memory-chip-prices

 

This fab alone is like 50% of sk hynix production, there have been multiple other fab shutdowns not due to fires as well

[Sakkura]

57 minutes ago, valdyrgramr said:

https://www.gamersnexus.net/industry/3186-chinese-government-investigating-dram-price-fixing-allegations

Was that ever proven as I was talking about this, but to be fair I haven't fully looked into the matter since China started investigating.

Not proven, the Chinese investigation is ongoing and AFAIK also the class action lawsuit in the US.

19 minutes ago, S w a t s o n said:

https://www.theguardian.com/business/2013/sep/06/china-fire-memory-chip-prices

 

This fab alone is like 50% of sk hynix production, there have been multiple other fab shutdowns not due to fires as well

That was long before the period we're talking about. Also most DRAM production is outside China.

[S w a t s o n]

4 minutes ago, Sakkura said:

Not proven, the Chinese investigation is ongoing and AFAIK also the class action lawsuit in the US.

That was long before the period we're talking about. Also most DRAM production is outside China.

No it's not, the RAM price increase started with DDR3 and carried into DDR4. This kicked it off. Additionally like I said this is 50% of SK Hynix's Production, so about 15% of world total supply of dram wafers. After this fire each foundry then had it's own "issues" whether it was micron's gas leak or samsung's power outage.

 

Multiple class actions in the US have been proven and won btw

[Tech Enthusiast]

On 8.9.2018 at 12:20 AM, Reavantos said:

I really don't know what to make of this.

 

That did not stop you from putting a clickbait title with the most clickbaity conclusion possible in this case.

"I don't know if he killed the guy,... but he did!"

 

On 8.9.2018 at 12:28 AM, Wh0_Am_1 said:

It sounds to me that Samsung and SK Hynix are just doing their due diligence to balance supply and demand, why make more of it when it's unprofitable, otherwise they would have to do something awkward like what Nvidia with the 20 series due to oversupply with the 10 series, which resulted from Nvidia ramping up production of the 10 series in response to the global GPU shortage.

 

Exactly my thinking actually.

Why are we putting on tinfoil hats again here?

 

If there is an oversupply, it means the current manufacturing capacity is already exceeding the demand. They are not closing down factories, they just stopped building more. Which still means they produce more than they sell, which still means prices will go further down. 

What they are doing now is basically not burning money for the sake of it.

 

Who in this topic with the tinfoil hat on would act differently?

Can you elaborate on why a company should build more factories if they already produce too much? How would that be financially wise? How would they explain that to shareholders? How is that price fixing? What is price fixing in your dictionary anyway?

 

Look, I am all against price fixing, but before tossing terms around, make sure you understand them (hint, even if they would destroy all their factories but one, it would not be price fixing). Also, try to not put up that tinfoil hat for every little thing a company does. Not every single thing they do is just being done to piss you off personally.

[JoostinOnline]

*allegedly

 

You can't just decide that's why they did it.

[S w a t s o n]

Just now, Tech Enthusiast said:

snip

For the last like 5 years we've been in some sort of dram shortage but suddenly there is an oversupply? And so now suddenly they do not feel the need to produce as much, hmm must be tinfoil. In this specific case it may or may not be literal price fixing but it doesn't need to be literal price fixing for them to be assholes. They can still manipulate the market without coming to a literal agreement for which they have been fined and sued for multiple times in the past

[Sakkura]

14 minutes ago, S w a t s o n said:

No it's not, the RAM price increase started with DDR3 and carried into DDR4. This kicked it off. Additionally like I said this is 50% of SK Hynix's Production, so about 15% of world total supply of dram wafers. After this fire each foundry then had it's own "issues" whether it was micron's gas leak or samsung's power outage.

 

Multiple class actions in the US have been proven and won btw

DRAM prices dropped in 2014-2015, and started rising in 2016. That fire was in 2013.

 

Spoiler

 

[S w a t s o n]

3 minutes ago, Sakkura said:

DRAM prices dropped in 2014-2015, and started rising in 2016. That fire was in 2013.

 

  Hide contents

 

How interesting that graph doesn't go earlier than 2014, lets see the pre-2013 fire spot prices

 

DRAM also was not cheaper to the consumer in 2015-2016 that was the height of expensive RAM