I don’t know if they realize that collusion lends itself to feast/famine.

but if you don't collude during times of feast you will have famine, and during times of famine you will have famine, in an economy based on feast/famine you must sometimes feast or die.

There are a lot of cyclical businesses that make money every year. It requires careful management. Factories can produce less than full capacity - but you better design for that. you can make money in the worst years without laying anyone off even - but it requires careful attention to details and not over hiring in good times as if they will never end.

Factories working at (significantly) less than full capacity gets a bit harder when you've got one of the most expensive machines on earth working in them, and production lines that'll be out of date in a couple of years

the normal way to do that is by hiring/firing to meet demand, but in the fab business, you have 10s of billions of dollars of capex with relatively little opex. if you're running at <90% capacity, you're losing money.

That is the common way, but there are companies that manage without hiring/firing. (or they hire temp workers). There is a minimum level of capacity you need to run just to keep the lights on, and figuring out how to get that low without impacting your ability to serve the highs is hard. Memory manufactures have not gotten very low, probably for good reasons, but it is something they should work on.

Last year ai folks are all over wallstreet and articles, decrying how hardware folks are a roadblock to new frontiers in AI. They just couldn't print and pack the new chips faster.

The problem in this case seems to have sprung from a lack of collusion. Altman reportedly approached Samsung and SK independently to strike deals for a large chunk of both companies' production. Neither party apparently knew he was negotiating with the other.

If they had actually been communicating or colluding with each other, they would have put the screws to him, making it harder for OpenAI to assert control over the vast majority of the DRAM market.

Failing that, you'd like to think a regulatory agency somewhere would step in to keep a single player from hosing everybody else, but...

> Failing that, you'd like to think a regulatory agency somewhere would step in to keep a single player from hosing everybody else, but...

Up until AI there weren't really players being able to gobble 40% of the market so nobody was looking.

> Neither party apparently knew he was negotiating with the other.

I don’t buy it that two of the largest manufacturers of DRAM in the world, from the same country, didn’t know this. Even of you ignore each company’s intelligence teams, that’s also the job of the country’s internal intelligence services, to make sure they know what all companies are doing and then make it so they have the best leverage to gain as much as possible. Both companies would have known “somehow” and played hardball.

Wut? How they [gov] would know that?

By spying?

How would the country’s internal intelligence services know what’s happening? Yes, by spying. That’s literally their job and they have assets in every critical area in a country. Every institution, every major industry player, they are monitored to a degree by the internal intelligence in every country in the world. There are more nefarious reasons to do this but the ostensible one is that if it’s of strategic importance the country needs to know everything there is to know.

The companies also do a lot of spying themselves, every bit of info could give them an edge.