[someperson]

As a outside observer, NAND and DRAM prices have skyrocket ed with the AI infrastructure boom just as the China-based fabs are coming online.

It is wise for these Chinese fabs to eventually use a very aggressive dumping strategy to price well below cost push out other players forever, especially in DRAM.

But right now it seems they can max out their supply capacity without selling below cost.

Appears to me like China's endless state led (often unproductive) investment in semiconductor manufacturing subsidies (for decades) is about to pay off with some industry dominance soon.

Like the electric vehicle sector.

[RobotToaster]

It's amazing what can be achieved when you can plan 5 years in advance, instead of just making the line go up for the next quarter.

[abtinf]

History is littered with the corpses of those slaughtered by the millions in the name of great leader’s 5 year plans.

https://en.wikipedia.org/wiki/Great_Leap_Forward

[nine_k]

Not five, but likely twenty-five. Not specific plans but attention: situation changes all the time, but the interest remains.

[odiroot]

Most importantly it's amazing what you can achieve if you can cut the red tape.

[andersmurphy]

But, we do plan 5 years in advance. Cloud, VR, Crypto, and now AI. All glorious five year plans from the Silicon Valley Planning Bureau comrade.

[ponector]

Also amazing what could be wasted when you can plan 5 years in the wrong direction. Remember USSR computers? They also been planned years in advance.

[xnx]

If CXMT new what was coming 5 years ago, they could've bought NVDA stock and 14x their investment.

[constantcrying]

This has nothing to do with 5 year plans, but with having a functional and competent government enable to enact a coherent long term policy.

In western countries every couple of years we elect a new clown show, which then proceeds to destroy whatever the last clown show tried to accomplish. That has happened again and again for decades, truly awesome "our democracy".

[victorbjorklund]

Don’t forget all the times those plans fail because the world did not turn out to be what you thought it would.

[pclmulqdq]

Dumping is when you sell things for below cost. It is not dumping when you charge a 500% markup instead of a 1000% markup, even if the market is currently selling at that markup.

[HauntingPin]

I thought the same but when I googled, the results disagreed with this point of view.

https://en.wikipedia.org/wiki/Dumping_(pricing_policy)

All the laws listed there define dumping as something being sold below the "normal price" and there being some quantifiable harm being done to local industry of the country being exported to.

So it has nothing to do necessarily with the cost of production, and based on this it could be considered price dumping.

[dygd]

> It is wise for these Chinese fabs to eventually use a very aggressive dumping strategy to price well below cost push out other players forever, especially in DRAM.

Crucial's departure from the consumer market left such a gaping hole, that CXMT doesn't even need to push other players out to gain a footing.

[RobotToaster]

It's more like everyone else abandoned the market, and CXMT realised it was free real estate.

[Maxious]

CXMT was already an option for consumers via brands like Kingbank and Asgard.

There's Kingbank DDR5 using CXMT modules starting to become available in Australia https://www.techpowerup.com/346479/hardware-unboxed-examines... including from mainstream retailers like Mwave https://www.mwave.com.au/memory/pc-ddr4/kingbank https://www.mwave.com.au/memory/pc-ddr5/kingbank

[maxglute]

How's it dumping below cost when hey can simply sell for 100% margins instead of western makers selling for 400%.

[shimman]

Because only western companies are allowed to make massive profits at the expense of entire nations, it's not greed when they do it apparently.

[jml7c5]

It's easy to misread, but they're not arguing that. Note the "eventually" and "but right now".

[nutjob2]

It's funny that you call this an "very aggressive dumping strategy" while AI vendors are doing the same but with even greater losses and on a much larger scale.

It's all simply a fight for market share.

The original sin is the existing DRAM vendors selling their entire (spare) capacity to the likes of OpenAI.

[sho]

Can we please stop with this irritatingly persistent myth? AI companies, at least the big ones, do not sell inference at a loss - far from it. This has been debunked and explained many times and yet it keeps being repeated.

The numbers aren't public but most guesses I've heard are that Anthropic's markup is around 50% on average, and that if considered in isolation, most models are profitable overall. The constant losses are instead due to training the next models, which will also eventually recoup but later, and forward capex investment.

This idea that big AI companies are normally and systematically selling inference at a loss as some kind of market share strategy is just not supported by the facts.

[xadhominemx]

No one sold their capacity to OpenAI. The vast majority of DRAM is transacted in what is essentially a quarterly auction.

[yogthos]

I find people tend to miss the productive aspects of Chinese state led investments because they don't consider their value at scale. Take the HSR system, it has been derided time and again as being wasteful, and too expensive, and so on. Yet, now it's become a key artery for trade and commerce across China. It allows goods to move at an incredible speed, boosts tourism, and helps overall development of many regions which otherwise wouldn't see much economic activity.

[PowerElectronix]

I personally fail to see the downside of any manufacturer selling forever at a loss, except for the manufacturer itself.

[xyzzy123]

You become dependent on the supplier.

The downside in general is that other countries lose production capacity in steel, heavy industry, semiconductors, machine tools etc - industries that took decades to build and can't be easily replaced.

Also they gradually lose the ability to meaningfully innovate in those sectors because there's no grounding against production reality anymore.

This has geopolitical consequences further down the line.

[skeeter2020]

First, they're not selling at a loss; the huge price increases have allowed them to push aggrssively in the legacy markets. They're making "slightly smaller" profits than other manufacturers (of which there are now very few).

Second, they can drive out all competition and then have a captive audience for whatever prices they want, as the barriers to entry in these markets are very high. This is essentially what's happened with all higher-end manufacturing in the west over the past 30+ years.

[gchamonlive]

Because it's never forever. It's until the corporation substitutes the market, at which point you are at their mercy.

[creato]

If you actually believe this, then what is your explanation for a manufacturer to do this?

Do you think they are just stupid?

[fph]

Microsoft gave away Internet Explorer at a loss, and what happened to internet standards?

[numpad0]

the currency eventually collapses

[abtinf]

> It is wise … to price well below cost push out other players forever

I challenge you to name a single successful example of this that isn’t state enforced.

[api]

All VC funded companies that release free or underpriced products and services, capture market share, then raise prices or enshittify?

The entire business model of VC funded tech?

[neves]

Uber

[stingraycharles]

Amazon?

[PearlRiver]

Chinese investment has not been unproductive. It gave them independence so that the US could not cut them of- see Cuba.

[gchamonlive]

Is China doing to DRAM what Amazon did to bookstores?

[SlinkyOnStairs]

> It is wise for these Chinese fabs to eventually use a very aggressive dumping strategy to price well below cost push out other players forever, especially in DRAM.

It's not dumping, it's the opposite.

Sam Altman's stunt has created massive amounts of fictitious demand (OpenAI isn't using those wafers it's ordering) and triggered massive panic-buying from everyone else.

Prices are arteficially high, this has turbocharged China's fab and R&D budgets as you observe.

> is about to pay off with some industry dominance soon.

They're not looking to dump the semiconductor markets. They're looking to invade Taiwan.

All this buildout in their semiconductor industry is to detach themselves from the western semiconductor industry that will either sanction them if they invade Taiwan, or in the case of TSMC, suffer major damage in the ensuing conflict.

That the collapse/destruction of the Taiwanese semiconductor and electronics industries will utterly ruin the western tech industry is somewhere between a happy coincidence and acceptable collateral damage to them. No dumping required.

[dontlaugh]

Why would they bother to invade Taiwan when they’re winning economically and diplomatically?

Public opinion in Taiwan is rapidly changing towards peaceful re-unification and no one anywhere on earth trust the US will help them with anything.

[fc417fc802]

> utterly ruin

I realize Intel has done some serious ball dropping over the past two decades but you do realize the US has on shore cutting edge fabs, right? It's only luxury consumer electronics and the highest end corporate gear that use cutting edge nodes to begin with.

Disruption of the cutting edge would certainly wreak havoc on the pricing and specs of high end luxury electronics but that would hardly be the end of the world. I still use a desktop with DDR3 on a daily basis (granted the GPU is much newer with GDDR6) and my laptop is from the early era of DDR4 ...