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0 pointsgimmeThaBeet1mo ago0 comments

I struggle to think of a line of business as cyclical as DRAM, maybe like certain kinds of mining would be my only thought.

The DRAM fabs have been on a roundabout for 40 years going from getting accused of price fixing and cartel behavior, to struggling to keep the lights on.

And imo it's not really their fault, it's all the lead time of advanced semiconductors, combined with the commodity dynamics of oil. And the goal is to match that supply to the demand of everything from consumer electronics to more datacenters than you can shake a stick at.

It's maddening to try and solve that, so at this point I really don't fault them for prioritizing survival.

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theshackleford1mo ago· 1 in thread

> from getting accused of price fixing and cartel behavior

"Accused" makes it sound like these things may still be up in the air, when they very much are not. I would choose instead the much clearer "A number of those involved in DRAM production have a proven history of cartel behavior and price fixing."

For those who may not be familiar with some of the history in this area:

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

gimmeThaBeetOP1mo ago

I said accused mainly because the big 3 won their last antitrust suit in the US, sort of "what have you caught me for, lately?" approach.

For all I know, maybe they are dumb enough to try and actually coordinate again, my hunch would be no, or they've tried something new and inventive. Like Matt Levine talked about how so many landlords were using the same software to set prices, that one was pretty shady.

But it is interesting where it is popping up at the moment, like power transformers is another area. These companies have lived through these cycles before, and know there is no one to save them if they overleverage and get it wrong.

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