Global DRAM Revenue Down 30% in 3Q22—Unprecedented Since 2008 Financial Crisis

[Flyordie]

I'm sitting on $9,000USD in spare cash. No debt. I've just scaled back my spending and dumped into savings because I don't see any need to upgrade anything I have right now.

My PC does everything I need it to. Now if AMD were to make a product I want, then sure. I'll upgrade and spend $2,000-3,000 to do it. But they don't have any products now or coming up that I want or would entice me to upgrade. I am sure there are millions of others like me in the same position that their current PCs are doing them just fine so they are holding onto them.

 

[ixi]

My crystal ball also foresee a flood, fire and catastrophic power failure at a major SSD\NVMe factory, maybe two...

You sir = Legend.

 

[Deleted member 185088]

Like, everybody stuffed pc hardware for 2 years in the frenzy covid19 home time.
The market is saturated and recession winter is coming.
A good time for a big correction.

My crystal ball also foresee a flood, fire and catastrophic power failure at a major SSD\NVMe factory, maybe two...

They'd rather burn everything than drop prices and make some money back.

 

[Garrus]

Unprecedented, more like expected given the current financial/global crisis. The Fed is actively killing consumer demand...

It's not the FED that is killing consumer demand. Inflation does that just fine without any interest rate increases, and current rates are still very very low. Rates should be higher than housing inflation. If house prices go up 10 percent every year, rates need to be higher than 10 percent (something the Canadian government totally fails to pay attention to). Otherwise using debt to purchase assets is income earning, which is artificial, and would never happen without government intervention. We need higher rates, but most of all we need productive and not consumption focused government spending, that is how you get inflation under control. Build more, consume less. Not just interest rates.

Remember that even with the right policies, productivity is dropping rapidly because of aging. Then we make the mistake of giving seniors more purchasing power (old age security, pensions, government benefits like health care, all consumption) that don't follow from their earnings, while there are less and less people actually working every year. Korea and Taiwan have already lost half their young population. If you want to stop inflation you need higher birth rates, later retirement, less consumption spending on the elderly and getting the young to work sooner. The original model of young people supporting their elderly parents while the parents support child raising is efficient for a reason. Not "I'll retire for 30 years, produce nothing, and demand more than my lifetime earnings in benefits in the meantime". THAT causes inflation.

Inflation means you need to pay more for food, energy, and housing. You have less discretionary income available. Voila. Interest rates are not the main cause of reduced consumer spending.

Also, I have zero sympathy for the DRAM makers. They are making ram more than 10 times as dense as a decade ago. Where are our 128GB sticks for the price of 16GB ones? I bought 32GB of DDR3 for $110 more than 10 years ago. Still waiting for 32GB for <$100 today. They make plenty of money.

 

[Bruno Vieira]

Like, everybody stuffed pc hardware for 2 years in the frenzy covid19 home time.
The market is saturated and recession winter is coming.
A good time for a big correction.

My crystal ball also foresee a flood, fire and catastrophic power failure at a major SSD\NVMe factory, maybe two...

What does the NAND industry has to do with the DRAM one?

 

[Dirt Chip]

What does the NAND industry has to do with the DRAM one?

My bad, repalce NAND factory with DRAM factory .
Fix.

 

[TheinsanegamerN]

It's not the FED that is killing consumer demand. Inflation does that just fine without any interest rate increases, and current rates are still very very low. Rates should be higher than housing inflation. If house prices go up 10 percent every year, rates need to be higher than 10 percent (something the Canadian government totally fails to pay attention to). Otherwise using debt to purchase assets is income earning, which is artificial, and would never happen without government intervention. We need higher rates, but most of all we need productive and not consumption focused government spending, that is how you get inflation under control. Build more, consume less. Not just interest rates.

Remember that even with the right policies, productivity is dropping rapidly because of aging. Then we make the mistake of giving seniors more purchasing power (old age security, pensions, government benefits like health care, all consumption) that don't follow from their earnings, while there are less and less people actually working every year. Korea and Taiwan have already lost half their young population. If you want to stop inflation you need higher birth rates, later retirement, less consumption spending on the elderly and getting the young to work sooner. The original model of young people supporting their elderly parents while the parents support child raising is efficient for a reason. Not "I'll retire for 30 years, produce nothing, and demand more than my lifetime earnings in benefits in the meantime". THAT causes inflation.

Inflation means you need to pay more for food, energy, and housing. You have less discretionary income available. Voila. Interest rates are not the main cause of reduced consumer spending.

Also, I have zero sympathy for the DRAM makers. They are making ram more than 10 times as dense as a decade ago. Where are our 128GB sticks for the price of 16GB ones? I bought 32GB of DDR3 for $110 more than 10 years ago. Still waiting for 32GB for <$100 today. They make plenty of money.

You're SO close to getting it.....

 

[umeng2002]

What's that I hear? The worlds smallest violin playing. I have zero empathy for any electronics company based on what has happened over the past 2 years.

 

[Garrus]

You're SO close to getting it.....

That's not a useful comment. My point was that interest rates are not high at all. Would you lend $100,000 in exchange for 4% interest? Of course not. You'd die before you got any meaningful return. You could buy any real asset instead of lending money and make more money that way. Inflation causes consumer demand to drop dramatically because prices are higher. It's not the interest that kills demand. Try living in Turkey right now and importing foreign goods. How much can you buy now compared to last year? That's from inflation.

Anyways my point stands. DRAM is made just like other silicon. We have 50 billion transistor dies now, we should have 10 times more ram for the same price as 10 years ago. 128GB sticks should be $100. DRAM makers deserve no sympathy. DRAM price collusion is 100 percent a thing.

 

[dragontamer5788]

Would you lend $100,000 in exchange for 4% interest? Of course not.

My #1 investment this past year has been oil.

My #2 investment this past year has been cash. Gaining 4% is far better than losing 20% (Bonds), losing 25% (stocks), or losing 75% (cryptocurrencies). "Cash" in the form of SWVXX / Money Market funds (though if you kept a savings account, you should have performed similarly to my SWVXX account).

Don't hate on cash. Its done really well this year. (Cash-like bonds, like 3 month Treasuries, 3-month corporate paper, savings accounts, ultra-short ETFs, and others have also done pretty well). Its pretty much been the best year for cash in decades.

 

[Garrus]

My #1 investment this past year has been oil.

My #2 investment this past year has been cash. Gaining 4% is far better than losing 20% (Bonds), losing 25% (stocks), or losing 75% (cryptocurrencies). "Cash" in the form of SWVXX / Money Market funds (though if you kept a savings account, you should have performed similarly to my SWVXX account).

Don't hate on cash. Its done really well this year. (Cash-like bonds, like 3 month Treasuries, 3-month corporate paper, savings accounts, ultra-short ETFs, and others have also done pretty well). Its pretty much been the best year for cash in decades.

The point is interest rates should never be lower than ASSET inflation (not CPI, CPI is lower than asset inflation). If the average inflation is 6 percent, you can buy any real asset and make more than 4 percent, so you wouldn't lend it out for 4 percent.

Cash is not the same thing as lending money. You can get it back at any moment. I'm someone that has lost half my money because of "cash" so no I don't agree. Imagine you sold your home for a million dollars and then kept it in cash, meanwhile your house hit 2 million dollars 5 years later. Now your cash is actually worth half as much.

You are keeping cash, not making 5 or 10 year loans out to people, because you plan to exit cash soon.

 

[dragontamer5788]

Imagine you sold your home for a million dollars and then kept it in cash, meanwhile your house hit 2 million dollars 5 years later.

Imagine interest rates skyrocket, taking mortgage rates from 2.5% to 7% and with threats from the central bank to raise it by another 1.5% to 3.5% (8.5% to 10%+ mortgages).

Imagine this being a 100% foreseeable event.

And also imagine someone pretending that house values will go up over the next few months or even the next year in the face of large-scale layoffs (see layoffs.fyi) and these much much higher interest rates.

-----

House values have declined by over 10% in my area btw. Demand destruction has begun. Sure, it's a short term effect but you gotta factor in short term effects into your plans.

I can safely, and easily, predict a decline in house prices. I'll invest the cash after everything stops falling in price.

 

[DerrickOlley]

Crises are cyclical now there is a decrease in financial activity and a little later growth! As in the waves of the Ellion! Although, of course, I am far from financial markets and work in plastic surgery here as a cosmetic practice, financial markets are interesting to me! And I criticize The Fed for its reckless actions!