This article just reeks of BS. There is nothing officially substantiated beyond a Micron competitor reporting that a single court issued a temporary preliminary injunction. Micron has denied the report.
Given the obvious backlash China would face and the flimsiness of this article, if I were a betting man I'd be buying up Micron stock on this dip. So many things have to happen for this to result in a meaningful impact to Micron's earnings that I'd take the other side of that bet.
I'm not necessarily saying that the report is false. More that lots of things have to align in order for this to end with Micron losing significant market share in China. The report has to be true and the injunction enacted and the injunction has to hold up for an extended period of time.
Will be interesting to see what Micron says in the coming days. No doubt they would have to publicly address it if they were served with an injunction.
In many ways Trump's aggressive trade practices may be the only answer to this if Trump focused on China. Unfortunately he seems to be focused on Europe and Canada instead, which are small fry in the grand scheme of things. Fragmented Europe and Canada are not fighting for economic world leadership in the way that China is.
> In many ways Trump's aggressive trade practices may be the only answer to this if Trump focused on China.
That's circular, US "aggressive trade practices" (which means unilateral tarrifs, let's not spin, please) came first, so making them "the only answer" is sort of self-fulfilling.
Frankly it's much more likely that Chinese trade shenanigans like this are the result of the escalating trade war. The volatile climate makes "big steps" like enjoining a whole foreign company more attractive as the relative threat of retaliation is less. If you think your opponent is going to pull the trigger, you shoot first.
Now we just have to wait for more, ahem, "aggressive trade practices" to be announced by the White House, and we'll escalate further.
I genuinely thought I'd been pretty clear, so that question seems like you're trying an unhelpful "gotcha" instead of reading what I wrote.
I'm saying that Trump's "aggressive trade policy" (senseless surprise tarrifs) was the impetus for this particular action (senseless surprise import ban). Absent that, the IP theft would have continued quietly (as it always has, everywhere) and the destabilizing trade war wouldn't be happening.
You seem to be taking an absolutist perspective: IP theft[1] must not ever be tolerated and any action to prevent it, however destabilizing, must be taken. And that's how you get trade wars (real wars too, FWIW). This was a nice modern economy we had while it lasted.
[1] I mean, come on. It's ?!@#! DRAM and flash. There are a half dozen manufacturers all over the world making exactly this same junk. It's not like sudden "Chinese" threat to Micron was going to introduce competition in any way that Samsung and Fujitsu were not already providing. Please.
No, the market has concentrated and is very largely dominated by just 3 companies: Samsung and SK Hynix in Korea and Micron. I don't think China has a whole lot of choice as regards memory chips in the volumes that they need. And getting new supply up and running is a yrs long process.
> US "aggressive trade practices" (which means unilateral tarrifs, let's not spin, please) came first
This just isn't true. China has not played fairly against the US in modern history. Putting aside problems like currency manipulation, intellectual property theft, and putting up barriers for foreign companies, they also haven't played fair with regards to tariffs.
Take Elon Musk's word for it if you don't believe me: "an American car going to China pays 25% import duty, but a Chinese car coming to the US only pays 2.5%, a tenfold difference"
This makes it sound like the US was just a small country mislead by powerful China. In fact every agreement between Chinese and American companies was signed because of it was beneficial to both sides. It was the US that allowed American companies to setup shop in China and transfer their technology for what it looked like a good deal. Now the US wants to recant on its decades old policy as if this was a big surprise.
Well it is a little more complicated then that. Although it wasn't explicitly listed ( and I have no idea why it wasn't given most other countries had ), China would have to open up its market "more" to allow proper competition. Those deals, were signed after WTO, where it was beneficials to both in the long term. China gets to learn about the tech, and have US companies hiring there people, making investment into China under some partnership conditions. After 10 years it was suppose to be loosen. Instead US was trapped with investment money that cant be easily transferred out, and a market so big that they cant ignore.
it is childish at best to selectively focus on WTO agreements only. when China is banned from purchasing most high tech stuff from the US, even some intel Xeon processors and DELL computers, how could you possibly expect to have easier access to the Chinese market?
The US government should also become more consistent when it comes to international treaties and agreements, if those WTO agreements are indeed so bad to the US, why not just follow America's own paths in the Iranian deal, the Paris Climate deal and the UN human right commission case? Rather than keep crying on whether WTO is fair or not, maybe it is time to pack up and leave WTO? Trump mentioned it recently but didn't have the balls to actually make it happen, so sad.
The mainstream US media discourse on this is dishonest too, to say the least. Remember Politifact's 2012 lie of the year, the Romney campaign's claim that Chrysler was moving Jeep production to China? After it turned out that Chrysler was in fact setting up a Jeep factory in China, pretty much the entire US media insisted that the claim was still a lie because they were only building Jeeps there because of tariffs, as though those tariffs were some inevitable fact of life rather than an example of Chinese protectionism.
Romney's claim was after the news story about setting up a factory, not before (your chronology is wrong).
And he said they would move all production to China based on a mis-interpretation of the story:
"I saw a story today, that one of the great manufacturers in this state, Jeep, now owned by the Italians, is thinking of moving all production to China,"
He said all production, not some of it. He was riffing on a public news report that didn't say what he said it did.
No one plays fair in international trade. I mean, we've literally installed dictators in countries to get better trade consideration. And recently thanks to Snowden, we know that the NSA hacked AirBus to give Boeing an edge, and appears to believe that the "economic security" of the US is a component of their SIGINT domain.
I'm not really sure why we expect others to "play fair".
The most unfair thing is the slave labor wages being paid to Chinese workers to make the stuff that Americans enjoy daily. In trade you obviously trade off things you need for things they need, and you don't reach an agreement unless it was ultimately beneficial to you. And let me tell ya, I'd much rather be the side that has to deal with some tariffs than be the side that has millions of my population mired in slavery to service your nation.
The larger context here is this all takes place in the context of a DRAM market where prices have increased roughly 200% over the last 2 years (the same 16GB DDR4-3000 kits I paid $63 for 16 GB for in May 2016 are now $171). Meanwhile, Hynix, Samsung, and Micron are all planning to reduce capacity relative to projected growth of demand.
The DRAM cartel is very clearly back into action and China isn't going to sit by and let their electronics industry be strangled by these massive price increases. Over the last 6 months (before the Trump stuff even started) their anti-trust regulator has been having some pointed words with the DRAM fabs, backstopped by bringing their own domestic production online. Samsung, for one, is playing ball, and signed a memorandum of understanding with China's antitrust regulators.
Taking the DRAM cartel down a peg is a good thing for consumers, a good thing for downstream electronics manufacturers (phones/laptops/etc), and a bad thing if your name is "Samsung", "Micron", or "Hynix".
Now, are they going to be extra pointed about this with Micron considering Trump is starting a trade war? Absolutely, but this has been going on for a half year now.
Sure, but you are also forgetting the fact the DRAM industry was in glut and they suffered huge loss leading up to the point. Was it Cartels intend to drive the price so low that they would be almost out of business too?
> the DRAM industry was in glut and they suffered huge loss leading up to the point.
So what caused that glut? There are very few things that come to mind (if any) that I can think of that excuse price collusion in a market, which is what was claimed above.
What caused the glut was Samsung's massive expansion in the early 2010's. Samsung was trying to increase market share in DRAM and they pumped in billions in CAPEX to increase their manufacturing capacity. That not surprisingly drove down the prices of DRAM between late 2014 and 2016, which benefited consumers, but also huge loss for all DRAM makers. This also meant that they couldn't invest much into their future capacity which is why we have the kind of price surge that we now have. This is no brainer if you look at it as business cycle. It looks like all DRAM makers are increasing their output now, but probably not enough to bring down the price fast enough, as it takes years to ramp up production.
> Samsung was trying to increase market share in DRAM and they pumped in billions in CAPEX to increase their manufacturing capacity.
That's exactly how it's supposed to work. Every manufacturer is individually incentivized to increase supply to increase their own relative share of the market.
Of course, it's collectively better for all of them to choke supply, which is how we get OPEC and the DRAM cartel.
China's got a big electronics industry that needs DRAM for their products, so if Korea is going to choke supply then they're just going to start up their own fabs. And predictably, the DRAM cartel is now crying about the new kid on the block messing up their attempt to corner the market.
> It looks like all DRAM makers are increasing their output now, but probably not enough to bring down the price fast enough, as it takes years to ramp up production.
No, actually, they are contracting supply relative to projected demand. Demand is going up by 20.6%, supply is only going up by 5-7%.
> This also meant that they couldn't invest much into their future capacity which is why we have the kind of price surge that we now have. This is no brainer if you look at it from business cycle point of view.
Pretty sure they cut capex in 2016, which wouldn't have had an impact until like, this year. Are you saying that they cut capex and in a matter of months prices doubled? Yeah, doesn't seem correct to me.
> Was it Cartels intend to drive the price so low that they would be almost out of business too?
Samsung was "almost going out of business"? Bull fucking shit.
Actual, literal, "won't someone think of the poor corporations just struggling to make ends meet". Just wow.
Sure, Samsung was nowhere close to going out of business -- too big too fail? too much cash to fail? In fact Samsung had enough cash stashed away to weather the whole crisis and the company did continue investing through the trough.
>Meanwhile, Hynix, Samsung, and Micron are all planning to reduce capacity relative to projected growth of demand
Unless you have evidence to support this, all the company above you listed has have expansion capacity planned and made during the last two years.
>That's exactly how it's supposed to work. Every manufacturer is individually incentivized to increase supply to increase their own relative share of the market.
And they are. Yes, there may be a cartel going on. But it is a simple fact demand is outstripping supply. And no memory maker are willing to invest money into building fabs. Because building a new Fabs along with leading node is increasingly expensive. Moore's law didn't just ended for CPU, it is for all semiconductor companies. All current Memory makers has roadmap that will add 30% plus bit capacity to NAND without even making a new Fab with 3D NAND. GDDR Memory is also in complete shortage, and was blamed multiple times where GPU maker cant ship as much as they could, not that Nvidia and AMD could built them fast enough with TSMC anyway. TSMC has stated they have a whole dedicated fab for customer making their own Bitcoin ASIC, ( And has since confirmed as BitMine ), no GPU maker can make a prediction of how and when the Crypto craze ends, how are memory makers suppose to plan for their GDDR production capacity other then being conservative about it. And Nvidia now are getting problem of having high volume of GPU sitting in channel after BitCoin and Crypto crash.
Then there is the machine learning, AI craze, Datacenter segment seems to be growing with no limit. As shown outpacing Intel's projection quarter after quarter.
With Fab investment continue to increase, and takes longer to recoup, do you expect any sane company to take risk into building new Fab? When you know somewhere in the back of your head these craziness may not be sustainable?
That is not contracting their supply. Contracting their supply would mean taking fans offline. They are still increasing their supply!
Maybe it isn’t possible to built that much extra capacity. Maybe there isn’t the necessary budget/capital for that level of expansion? Maybe 5% is a sustainable rate of growth (and their supply chain), but 20% isn’t? There are lots of other factors at play here.
Contracting ‘relative to demand’ is a really disingenuous way to frame the argument.
Exactly. You don't need to be in DRAM / NAND or SemiConductor Industry, any industry are the same in their "projected" demand. There are always the intention they over project it, especially to those analysts reporting those figures, it is in their best interest to have DRAM / NAND maker to expand their capacity while they get much lower price.
Then there is the maths of 20% increase in "bits".
You see you don't need to build new fab to have increase in "bits" capacity. 3D NAND, 3D DRAM, EUV DRAM which Samsung is working on. Sub 10nm Node which Samsung / Micron are also working on and coming soon. All of these will increase their "bits" capacity without substantial investment. And as DDR5 standardise with larger maximum capacity per bank, better yield and leading node, and an expected increase of "bits" capacity by 50%+ in the next 3 years. Who will be there to say we will sell 50% more in 3 years time? Especially when Mobile sales are already slowing.
There is the China question. Before any media coverage started in late 2017 and 2018. China had always have plan to have their own DRAM and NAND Fab, with government money started pouring in 2015. That is, in the worst possible situation, assuming China somehow suddenly understand how to make DDR4, LPDDR4, what is there to stop them the race to bottom, and their massive influx of cash to build out new Fabs to bring huge capacity into the industry. Are you really willing to burn your own money, in the tens of billions against a nation?
Look at what happen to Steel, Solar Panel, etc The only difference is making DRAM is a lot harder then those two. I specifically leave out NAND here because 3D NAND are even harder for them to understand and grasp.
And I too, wanted cheaper DRAM and NAND. And I know in the old Cartel working, where they actually "reduce" capacity and hold price together via talks. But right now, I think the market dynamics is that they don't need to do any of these tricks to get what they wanted.
On the other hand, I want to see affordable RAM before I'm 60, so I don't care.
Patent law is fucked up at the moment. 28 years is far too long. Should we fix it the right way, yeah, but that's not going to happen, so given the choice between not having any RAM for 30 years or letting China fight it for me, I'm definitely going to not care if China flouts patent law. The system obviously doesn't work well so who cares?
Reminder: America was literally founded on ripped-off British patents (let's start with the cotton mill, among others). Developing country steals patents from developed country, film at 11. Now we are the developed country.
Now you throw in the fact that you've got cartel behavior from 3 companies who have near-complete control over the supply... and I'm supposed to cry for Micron here? Trust me, they'll be fine. Maybe they should push their capex back up instead of collecting rents (which is definitionally what a patent does).
> No, actually, they are contracting supply relative to projected demand. Demand is going up by 20.6%, supply is only going up by 5-7%.
The semiconductor industry is well know for the boom/bust cycle. It seems like folks are trying to manage investment and keep expansion to a sustainable level this time.
These hit-job news articles remind me of Samsung-Apple lawsuits which just ended last week. There were numerous anti-Samsung pieces (eg, the infamous Vanity Fair article comes to my mind which was rumored to have been influenced/paid for by Apple's lawyers at MOFO)_trying to sway the public opinion against Samsung during the course of the lawsuit. Samsung had a couple of opportunities to overturn the case, but the Obama administration actually stepped in in the name of "public interest" and reversed their win, effectively protecting Apple from getting punished for stealing Samsung's IPs.
Now, I'm going to wear a tin-foil hat and speculate that these blown-out-of-proportion articles are influenced and/or paid for by Micron and the US trade commission in anticipation of adversarial ruling from China. Micron is a politically well connected company and is also one of the last semi manufacturers in the US. It's important to develop and win public approval before making drastic public/trade policy -- not that Trump would care, but Micron certainly does.
I have no problem with this, BTW. I think it's fair to put nation's interest before IPs and other commercial activity -- as the Obama administration did. China likewise can do whatever they see as necessary to protect and nurture their own.
>Micron is a politically well connected company and is also one of the last semi manufacturers in the US.
Eh? There are less semi manufacturers in the US but only because theyve all been merging like crazy. There isnt less volume or engineers or anything. Just all under one of the big names now.
I have to assume that Trump is applying pressure to everyone else so that he can then offer to relieve the pressure if they get tough with China. If the pressure hadn’t been put on in the first place you wouldn’t have been able to motivate them to action. Or maybe Trump isn’t playing 3D chess.
You give too much credit to Donald. Most likely he is just doing what he thinks will get him the most media attention, and so far he has been wildly successful in doing so.
A question: Chinese courts rule against Micron...appeal after appeal. Biased or not, doesn't matter, a court ruling is a ruling. What options does Micron have after exhausting their China appeal options? I have a feeling we already know how they'll rule.
I see bad times...China wants the tech and they'll get it. Stealing is much faster and cheaper than spending tens of billions and decades in R&D
The claims in the article seem like hyperbole. The specifics of this sort of thing are very difficult to know, though it does seem like there may have been some state-enabled theft of intellectual property.
The key takeaway from this article for me is not the specifics of the case involving Micron, but the attitude of the Chinese government toward non-Chinese companies trying to compete in their country and their willingness to use underhanded tactics to prevent fair competition if it means furthering the agenda of a Chinese national actor.
We will have to wait to see how effective US tariffs are at preventing growth of the Chinese economy, but I imagine that they will be viewed as too little too late in the grand scheme of history.
I'm glad I bought my DDR4 last month. Prices are already insanely high. I'm paying almost double what I paid in 2016 for the same amount of ram. Does this patent affect current production DRAM? Are we going to see prices go up even more?
So, it has begun. Imagine just how nice will it be, once they will go after Qualcomms and Apples.
Will not happen you think? Back a few years, just as iPhone 5 began to ship, an administrator of a bonded customs zone decided to detain all and every Apple's shipment for a few weeks just to recheck all and every of their papers, and to make a statement "I am a big man here." And nobody of higher ups seemed to ever given a f##k about a single lowest tier official holding few billion bucks of Apple's money hostage.
58 comments
[ 4.4 ms ] story [ 28.4 ms ] threadThe stock is getting absolutely hammered, down 7% and still going down:
https://finance.yahoo.com/quote/mu?p=mu
The Chinese won't be able to hold their position on the Micron case. ZTE dies if they do.
It is just the whole trade war is going to unfold. It is definitely not easy to win.
Given the obvious backlash China would face and the flimsiness of this article, if I were a betting man I'd be buying up Micron stock on this dip. So many things have to happen for this to result in a meaningful impact to Micron's earnings that I'd take the other side of that bet.
Will be interesting to see what Micron says in the coming days. No doubt they would have to publicly address it if they were served with an injunction.
https://www.eteknix.com/micron-claims-chinese-startup-has-st...
Coincidence? Very much unlikely.
In many ways Trump's aggressive trade practices may be the only answer to this if Trump focused on China. Unfortunately he seems to be focused on Europe and Canada instead, which are small fry in the grand scheme of things. Fragmented Europe and Canada are not fighting for economic world leadership in the way that China is.
That's circular, US "aggressive trade practices" (which means unilateral tarrifs, let's not spin, please) came first, so making them "the only answer" is sort of self-fulfilling.
Frankly it's much more likely that Chinese trade shenanigans like this are the result of the escalating trade war. The volatile climate makes "big steps" like enjoining a whole foreign company more attractive as the relative threat of retaliation is less. If you think your opponent is going to pull the trigger, you shoot first.
Now we just have to wait for more, ahem, "aggressive trade practices" to be announced by the White House, and we'll escalate further.
This is what a trade war looks like, folks.
I'm saying that Trump's "aggressive trade policy" (senseless surprise tarrifs) was the impetus for this particular action (senseless surprise import ban). Absent that, the IP theft would have continued quietly (as it always has, everywhere) and the destabilizing trade war wouldn't be happening.
You seem to be taking an absolutist perspective: IP theft[1] must not ever be tolerated and any action to prevent it, however destabilizing, must be taken. And that's how you get trade wars (real wars too, FWIW). This was a nice modern economy we had while it lasted.
[1] I mean, come on. It's ?!@#! DRAM and flash. There are a half dozen manufacturers all over the world making exactly this same junk. It's not like sudden "Chinese" threat to Micron was going to introduce competition in any way that Samsung and Fujitsu were not already providing. Please.
No, the market has concentrated and is very largely dominated by just 3 companies: Samsung and SK Hynix in Korea and Micron. I don't think China has a whole lot of choice as regards memory chips in the volumes that they need. And getting new supply up and running is a yrs long process.
Not in the densities required for modern uses.
This just isn't true. China has not played fairly against the US in modern history. Putting aside problems like currency manipulation, intellectual property theft, and putting up barriers for foreign companies, they also haven't played fair with regards to tariffs.
Take Elon Musk's word for it if you don't believe me: "an American car going to China pays 25% import duty, but a Chinese car coming to the US only pays 2.5%, a tenfold difference"
https://www.cnbc.com/2018/03/08/elon-musk-sides-with-trump-o...
it is childish at best to selectively focus on WTO agreements only. when China is banned from purchasing most high tech stuff from the US, even some intel Xeon processors and DELL computers, how could you possibly expect to have easier access to the Chinese market?
The US government should also become more consistent when it comes to international treaties and agreements, if those WTO agreements are indeed so bad to the US, why not just follow America's own paths in the Iranian deal, the Paris Climate deal and the UN human right commission case? Rather than keep crying on whether WTO is fair or not, maybe it is time to pack up and leave WTO? Trump mentioned it recently but didn't have the balls to actually make it happen, so sad.
I just wish China would open up just a "little" more. To shut everyone up.
And he said they would move all production to China based on a mis-interpretation of the story:
"I saw a story today, that one of the great manufacturers in this state, Jeep, now owned by the Italians, is thinking of moving all production to China,"
He said all production, not some of it. He was riffing on a public news report that didn't say what he said it did.
I'm not really sure why we expect others to "play fair".
The DRAM cartel is very clearly back into action and China isn't going to sit by and let their electronics industry be strangled by these massive price increases. Over the last 6 months (before the Trump stuff even started) their anti-trust regulator has been having some pointed words with the DRAM fabs, backstopped by bringing their own domestic production online. Samsung, for one, is playing ball, and signed a memorandum of understanding with China's antitrust regulators.
Taking the DRAM cartel down a peg is a good thing for consumers, a good thing for downstream electronics manufacturers (phones/laptops/etc), and a bad thing if your name is "Samsung", "Micron", or "Hynix".
http://www.china.org.cn/business/2017-12/23/content_50157479...
https://www.theregister.co.uk/2017/12/21/china_memory_insour...
https://www.reuters.com/article/us-samsung-elec-chips-outloo...
https://seekingalpha.com/news/3327772-samsung-headed-china-a...
https://www.extremetech.com/computing/270666-china-launches-...
https://www.digitimes.com/news/a20180614PD212.html?mod=3&q=m...
Now, are they going to be extra pointed about this with Micron considering Trump is starting a trade war? Absolutely, but this has been going on for a half year now.
So what caused that glut? There are very few things that come to mind (if any) that I can think of that excuse price collusion in a market, which is what was claimed above.
That's exactly how it's supposed to work. Every manufacturer is individually incentivized to increase supply to increase their own relative share of the market.
Of course, it's collectively better for all of them to choke supply, which is how we get OPEC and the DRAM cartel.
China's got a big electronics industry that needs DRAM for their products, so if Korea is going to choke supply then they're just going to start up their own fabs. And predictably, the DRAM cartel is now crying about the new kid on the block messing up their attempt to corner the market.
> It looks like all DRAM makers are increasing their output now, but probably not enough to bring down the price fast enough, as it takes years to ramp up production.
No, actually, they are contracting supply relative to projected demand. Demand is going up by 20.6%, supply is only going up by 5-7%.
https://press.trendforce.com/press/20170920-2972.html
> This also meant that they couldn't invest much into their future capacity which is why we have the kind of price surge that we now have. This is no brainer if you look at it from business cycle point of view.
Pretty sure they cut capex in 2016, which wouldn't have had an impact until like, this year. Are you saying that they cut capex and in a matter of months prices doubled? Yeah, doesn't seem correct to me.
> Was it Cartels intend to drive the price so low that they would be almost out of business too?
Samsung was "almost going out of business"? Bull fucking shit.
Actual, literal, "won't someone think of the poor corporations just struggling to make ends meet". Just wow.
Hynix, Samsung, and Micron are making bank.
Unless you have evidence to support this, all the company above you listed has have expansion capacity planned and made during the last two years.
>That's exactly how it's supposed to work. Every manufacturer is individually incentivized to increase supply to increase their own relative share of the market.
And they are. Yes, there may be a cartel going on. But it is a simple fact demand is outstripping supply. And no memory maker are willing to invest money into building fabs. Because building a new Fabs along with leading node is increasingly expensive. Moore's law didn't just ended for CPU, it is for all semiconductor companies. All current Memory makers has roadmap that will add 30% plus bit capacity to NAND without even making a new Fab with 3D NAND. GDDR Memory is also in complete shortage, and was blamed multiple times where GPU maker cant ship as much as they could, not that Nvidia and AMD could built them fast enough with TSMC anyway. TSMC has stated they have a whole dedicated fab for customer making their own Bitcoin ASIC, ( And has since confirmed as BitMine ), no GPU maker can make a prediction of how and when the Crypto craze ends, how are memory makers suppose to plan for their GDDR production capacity other then being conservative about it. And Nvidia now are getting problem of having high volume of GPU sitting in channel after BitCoin and Crypto crash.
Then there is the machine learning, AI craze, Datacenter segment seems to be growing with no limit. As shown outpacing Intel's projection quarter after quarter.
With Fab investment continue to increase, and takes longer to recoup, do you expect any sane company to take risk into building new Fab? When you know somewhere in the back of your head these craziness may not be sustainable?
>annual global DRAM bit demand for 2018 will grow by a larger margin of 20.6%.
>the plans from the top three suppliers indicate that their respective wafer start volumes will expand by only 5% to 7% annually in 2018
Maybe it isn’t possible to built that much extra capacity. Maybe there isn’t the necessary budget/capital for that level of expansion? Maybe 5% is a sustainable rate of growth (and their supply chain), but 20% isn’t? There are lots of other factors at play here.
Contracting ‘relative to demand’ is a really disingenuous way to frame the argument.
Then there is the maths of 20% increase in "bits".
You see you don't need to build new fab to have increase in "bits" capacity. 3D NAND, 3D DRAM, EUV DRAM which Samsung is working on. Sub 10nm Node which Samsung / Micron are also working on and coming soon. All of these will increase their "bits" capacity without substantial investment. And as DDR5 standardise with larger maximum capacity per bank, better yield and leading node, and an expected increase of "bits" capacity by 50%+ in the next 3 years. Who will be there to say we will sell 50% more in 3 years time? Especially when Mobile sales are already slowing.
There is the China question. Before any media coverage started in late 2017 and 2018. China had always have plan to have their own DRAM and NAND Fab, with government money started pouring in 2015. That is, in the worst possible situation, assuming China somehow suddenly understand how to make DDR4, LPDDR4, what is there to stop them the race to bottom, and their massive influx of cash to build out new Fabs to bring huge capacity into the industry. Are you really willing to burn your own money, in the tens of billions against a nation?
Look at what happen to Steel, Solar Panel, etc The only difference is making DRAM is a lot harder then those two. I specifically leave out NAND here because 3D NAND are even harder for them to understand and grasp.
And I too, wanted cheaper DRAM and NAND. And I know in the old Cartel working, where they actually "reduce" capacity and hold price together via talks. But right now, I think the market dynamics is that they don't need to do any of these tricks to get what they wanted.
If it is a legitimate patent, it is supposed to allow them to choke supply.
Patent law is fucked up at the moment. 28 years is far too long. Should we fix it the right way, yeah, but that's not going to happen, so given the choice between not having any RAM for 30 years or letting China fight it for me, I'm definitely going to not care if China flouts patent law. The system obviously doesn't work well so who cares?
Reminder: America was literally founded on ripped-off British patents (let's start with the cotton mill, among others). Developing country steals patents from developed country, film at 11. Now we are the developed country.
Now you throw in the fact that you've got cartel behavior from 3 companies who have near-complete control over the supply... and I'm supposed to cry for Micron here? Trust me, they'll be fine. Maybe they should push their capex back up instead of collecting rents (which is definitionally what a patent does).
The semiconductor industry is well know for the boom/bust cycle. It seems like folks are trying to manage investment and keep expansion to a sustainable level this time.
These hit-job news articles remind me of Samsung-Apple lawsuits which just ended last week. There were numerous anti-Samsung pieces (eg, the infamous Vanity Fair article comes to my mind which was rumored to have been influenced/paid for by Apple's lawyers at MOFO)_trying to sway the public opinion against Samsung during the course of the lawsuit. Samsung had a couple of opportunities to overturn the case, but the Obama administration actually stepped in in the name of "public interest" and reversed their win, effectively protecting Apple from getting punished for stealing Samsung's IPs.
Now, I'm going to wear a tin-foil hat and speculate that these blown-out-of-proportion articles are influenced and/or paid for by Micron and the US trade commission in anticipation of adversarial ruling from China. Micron is a politically well connected company and is also one of the last semi manufacturers in the US. It's important to develop and win public approval before making drastic public/trade policy -- not that Trump would care, but Micron certainly does.
I have no problem with this, BTW. I think it's fair to put nation's interest before IPs and other commercial activity -- as the Obama administration did. China likewise can do whatever they see as necessary to protect and nurture their own.
Eh? There are less semi manufacturers in the US but only because theyve all been merging like crazy. There isnt less volume or engineers or anything. Just all under one of the big names now.
I see bad times...China wants the tech and they'll get it. Stealing is much faster and cheaper than spending tens of billions and decades in R&D
The key takeaway from this article for me is not the specifics of the case involving Micron, but the attitude of the Chinese government toward non-Chinese companies trying to compete in their country and their willingness to use underhanded tactics to prevent fair competition if it means furthering the agenda of a Chinese national actor.
We will have to wait to see how effective US tariffs are at preventing growth of the Chinese economy, but I imagine that they will be viewed as too little too late in the grand scheme of history.
https://i.redditmedia.com/r8e17LwuYxaAstKQy20-gHQAC717sHZxEA...
Will not happen you think? Back a few years, just as iPhone 5 began to ship, an administrator of a bonded customs zone decided to detain all and every Apple's shipment for a few weeks just to recheck all and every of their papers, and to make a statement "I am a big man here." And nobody of higher ups seemed to ever given a f##k about a single lowest tier official holding few billion bucks of Apple's money hostage.