My main hope with all the tech companies stumbling as of late would be a massive reduction in prices to drive volume... It's no longer a COVID economy now.Reply
At some point people are going to have to accept that the same cost drivers that were pushing up prices before COVID - mainly that fab processes are getting increasingly expensive both per-unit-area and per-transistor, combined with the increasing demand for performance-per-die meaning dies were continuing to get larger in terms of both transistor count and die area - continued to do so through COVID too. The supply chain disruption from the world's electronics supplier (China) being effectively shut off for a few months front-loaded price increases, but that was an acceleration of those increases rather than a temporary bump.
In effect: in terms of cost-to-produce, perf/cost has been stagnant for several years. In terms of perf/price (price to purchase as an end user) any gain in the last few years has been from suppliers shaving their margins, or to some extent refining suboptimal designs that had left performance on the table (but the latter can only gain so much). Reply
"fab processes are getting increasingly expensive"
semiconductor tech is caught (now and forever more) between a rock and a hard place: rock - the tyranny of fixed cost means that as fab becomes ever more capital intensive, the only way to make money is to boost production to 24/7/365 in order to maximize output and reduce amortization and depreciation costs per unit. they ain't much in-production labor to make redundant in order to make money.
hard place - who really needs the latest and smallest CPU/GPU/SSD?? basically, either pimply faced teenage boy-gamers or a handful of server farms.
most everyone else - the law of diminishing returns is the knockout punch. such folk don't need more than 640K as Uncle Bill pronounced decades ago. what was good enough 5 years ago is good enough today and the next 5 years.
the result, as the cutbacks across the industry recently announced make quite clear, is that for the vast majority of potential buyers there's just no reason to have FOMO. without exponentially increasing demand for the various widgets, 24/7/365 production is a pipe dream. gamers? yet more data centers? AI? that will, if anything, net-net reduce the need for cycles and storage across the globe; assuming, of course, that its output is in fact 'intelligent'.
it would be nice to know who among the various actors in the industry made up those Rose Colored Glasses predictions of unmet demand for widgets. only The Shadow knows.Reply
I think the problem is so many bought tech during COVID that they now don't need to buy anything, combine that with a world wide recession caused by COVID and the Ukraine war and people aren't spending what they have. If you massively reduce prices then all those who needed to buy something will spend less on your product as it's cheaper so you are worse off unless you can convince a lot of other people to buy which might not happen due to above reasons. Hence I suspect what will happen is tech companies batten down the hatches, go through the restructuring and laying off process to remove any dead wood, and wait for better days ahead.Reply
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StevoLincolnite - Wednesday, May 3, 2023 - link
My main hope with all the tech companies stumbling as of late would be a massive reduction in prices to drive volume... It's no longer a COVID economy now. Replyedzieba - Wednesday, May 3, 2023 - link
At some point people are going to have to accept that the same cost drivers that were pushing up prices before COVID - mainly that fab processes are getting increasingly expensive both per-unit-area and per-transistor, combined with the increasing demand for performance-per-die meaning dies were continuing to get larger in terms of both transistor count and die area - continued to do so through COVID too. The supply chain disruption from the world's electronics supplier (China) being effectively shut off for a few months front-loaded price increases, but that was an acceleration of those increases rather than a temporary bump.In effect: in terms of cost-to-produce, perf/cost has been stagnant for several years. In terms of perf/price (price to purchase as an end user) any gain in the last few years has been from suppliers shaving their margins, or to some extent refining suboptimal designs that had left performance on the table (but the latter can only gain so much). Reply
FunBunny2 - Wednesday, May 3, 2023 - link
"fab processes are getting increasingly expensive"semiconductor tech is caught (now and forever more) between a rock and a hard place:
rock -
the tyranny of fixed cost means that as fab becomes ever more capital intensive, the only way to make money is to boost production to 24/7/365 in order to maximize output and reduce amortization and depreciation costs per unit. they ain't much in-production labor to make redundant in order to make money.
hard place -
who really needs the latest and smallest CPU/GPU/SSD?? basically, either pimply faced teenage boy-gamers or a handful of server farms.
most everyone else -
the law of diminishing returns is the knockout punch. such folk don't need more than 640K as Uncle Bill pronounced decades ago. what was good enough 5 years ago is good enough today and the next 5 years.
the result, as the cutbacks across the industry recently announced make quite clear, is that for the vast majority of potential buyers there's just no reason to have FOMO. without exponentially increasing demand for the various widgets, 24/7/365 production is a pipe dream. gamers? yet more data centers? AI? that will, if anything, net-net reduce the need for cycles and storage across the globe; assuming, of course, that its output is in fact 'intelligent'.
it would be nice to know who among the various actors in the industry made up those Rose Colored Glasses predictions of unmet demand for widgets. only The Shadow knows. Reply
Dribble - Wednesday, May 3, 2023 - link
I think the problem is so many bought tech during COVID that they now don't need to buy anything, combine that with a world wide recession caused by COVID and the Ukraine war and people aren't spending what they have.If you massively reduce prices then all those who needed to buy something will spend less on your product as it's cheaper so you are worse off unless you can convince a lot of other people to buy which might not happen due to above reasons.
Hence I suspect what will happen is tech companies batten down the hatches, go through the restructuring and laying off process to remove any dead wood, and wait for better days ahead. Reply
Threska - Wednesday, May 3, 2023 - link
Main reason to buy is as a replacement for something. e.g. breakage, failure, theft, etc. Reply