[dwa3592]

We bought a 2TB Sandisk SSD back in 2024 for around $95 from best buy. Today 1TB ssd by sandisk is $166(the cheapest that i found, and it goes for $199 in walmart). Market is forcing people to become renters than buyers and there is no force countering that idea. Its a market failure that people will study 10-15 years from now.

EDIT- The same 2TB ssd is now $329.99 at bestbuy.

[hikarudo]

It's not a market failure, it's just supply and demand. There are many computer components competing for the same resources (fabs, wafers). Demand for GPUs, RAM etc. has increased a lot due to AI, but supply is still the same due to new fabs being huge investments that take years to build. Of course the price goes up.

[wtallis]

> There are many computer components competing for the same resources (fabs, wafers).

That's a bit off the mark. Processors, RAM, and flash memory each require their own specialized fabs. TSMC makes processors but not DRAM or NAND flash. Kioxia makes flash only. Samsung has all three types of fabs. Micron does DRAM and NAND, in different fabs.

The increase in SSD prices is not because there are many components competing for the same constrained resources, it's that they are complementary goods being subject to the same dynamics in parallel because the servers that are causing this demand spike need all of those components. Where we do see competition for the same fab capacity is in the mix of DRAM types, where GPUs want HBM, server CPUs want DDR5, laptops and phones (and the occasional server CPU) want LPDDR. And competition among different types of processors for TSMC's fab capacity.

[lgg]

I mostly agree, but if you go further back in the supply chain there are a number of common inputs/tools. For example, as 2025 the new LPDDR lines are using EUV systems, which means for new fab production both DRAM and logic producers are competing for machines from ASML.

It doesn't change your point that these lines are different and the immediate price spike is not about them competing for capacity in the same facilities, but the fact that manufacturers are committing to large enough future purchases to drive new fab construction means that future pricing outlook (which does impact the current prices to extent) does involve some amount of competition between different types of semiconductor products.

[spacebacon]

Shared skilled labor is another thing to consider.

[wtallis]

That's only going to change on similar timescales to the fab capacity, which is to say multiple years.

[hikarudo]

Thanks for the correction. You're absolutely right.

[state_less]

An industry doesn't need to increase supply when demand increases, they can absorb the demand as profits. More so in an industry that is hard to enter into. Consumers hate this and call it all sorts of things like market failure, gouging, etc... In this case, the suppliers are slow walking increases in production and enjoying a run up in profits. They raise concerns about oversupply, as if this deep learning thing were some passing fad and the market will have no use for the new supply if it passes. It's a dubious notion though, the demand is here to stay and new supply needs to come online to meet demand. We simply need more silicon in the market. High prices should eventually bring new supply online, but I'm a little disappointed by the rate of the ramp up.

[aftbit]

>It's a dubious notion though, the demand is here to stay and new supply needs to come online to meet demand.

This is a big bet. Look at what happened in 2001 with the dot-com boom. We're still trading on their dark fiber over-build today. Meanwhile any overcapacity built in fabs will quickly be made obsolete by newer and better fab technology (or at least, that's been the pattern for the past 30 years).

I think you're missing the fact that building new supply takes time and sustained commitment, and there's simply nobody in a good position to make that commitment without losing big if your thesis turns out to be wrong.

If the demand for new AI builds is eventually satisfied, or worse, craters overnight, then who will be left holding the bag? It sure won't be Google or Apple, or even NVIDIA - it will be TSMC and Samsung.

But as you mention, this is all temporary. Either you're right, and demand will remain sustained long enough for some of the providers to decide to take that risk, or demand will crater and prices will fall.

The fact that the S&P 500 is near record highs at the same time as consumer confidence is at a 70 year low is not encouraging for continued all steam ahead in my mind... but then it's easy to predict a general future recession, and much harder to predict it to the day.

[state_less]

The idea that we're still trading dark fiber from 2001 is an old narrative right? I guess it is still floating around. But, we're in a second big fiber build out for not only residential, but also to connect all these new data centers. Could there be some demand oscillation for silicon? Sure, but overall deep learning is not some passing fad even if someone gets too far out over their skis and over buys. So far Big Tech has increased spend 3 years in a row and next year they'll spend more than this year. Demand has evidently not let up for AI services, we still need more silicon.

I doubt consumers will regret these compute purchases in 3 years, my 3 year old GPU is still holding value, actually increased in value, and I use it more now than ever.

I did predict or expect that if oil went to $150 we'd be in recession territory, currently hovering below that level and folks are feeling the squeeze and aren't happy. Things could get worse or better, tough to tell, but I think silicon demand is more or less secular and will do relatively well in a variety of macro conditions.

[jandrewrogers]

The dark fiber from the dotcom era is approaching the end of its life expectancy. Contracts for leasing dark strands reflected that. Most of it likely still has useful life left that the owners will want to monetize but it might change how it is used.

[robocat]

> too far out over their skis

Bad metaphor. Not being forward enough is a common mistake. When learning, you may want to make yourself _feel_ like you're too far forward. We can commonly think we're too far forward when actually overall we're still too far back. Teaching it is very hard.

Although it is dependent on your style of skis (e.g. carving) and style of skiing (powder, racing, cruising).

For me, it is very rare that I go too far forward (I began with a leant back style and I haven't rectified that after many years of skiing). I try to prioritise fun over ability.

[aftbit]

This seems like it would be easy to structurally solve - big tech could make strategic partnerships with 5 to 10 year horizons with the very fabs in question. If they promised to spend a flat or growing $X on silicon (without easy contract cancellation) over the next decade, then the risk would be entirely on the tech companies and not on the fab companies. Of course, there's always bankruptcy to worry about, but that's less of a threat for Google and Apple than it is for OpenAI or NVIDIA.

The fact that we _haven't_ seen such deals be made, and that ~50% of new datacenter builds have been quietly cancelled[1], suggests to me that we're dealing with paper demand more than true sustained demand.

1: https://www.tomshardware.com/tech-industry/artificial-intell...

[jandrewrogers]

> the suppliers are slow walking increases in production and enjoying a run up in profits

The major companies have been trying to build >$100B of new production capacity in the US for years now. All of these manufacturing facilities have been significantly delayed by NIMBYs using the same "environmental and community concerns" advocacy slop that hinders almost all productive industry in the US.

Blaming the suppliers is a lazy take. They aren't responsible for degrowth activists being able to dictate what we are allowed to build.

[cm2187]

Also my understanding is that a lot of the suppliers remain skeptical / prudent about the long term demand from AI. Not their first boom/bust cycle.

[throwaway67743]

Or their continued collective inability to predict or manage supply and demand, it happens repeatedly and previous events were very minor in comparison... The other obvious reason is profiteering but pretty much impossible to prove.

[cm2187]

They are public companies, their bottom line isn't exactly secret. The only company that is really squeezing the market in term of prices is nvidia and they aren't the production bottleneck.

By the way, interesting podcast on that topic: https://www.youtube.com/watch?v=mDG_Hx3BSUE

[josephg]

> The other obvious reason is profiteering

When supply is constrained, widgets to get sold to whoever is willing to pay the most. It’s capitalism, baby. Arguably this is a good thing, because the limited resources are allocated to the people who can create the most value from them. And high prices provide an economic incentive to bring more supply online.

Nvidia is making big profits right now because they don’t have a lot of competition for their fancy AI chips. The prices will come down when they have more competition.

[throwaway67743]

That only works if the market is not controlled by basically 3 vendors and if the market isn't also pretty much impossible to break into. The value proposition is tenuous at best, the real value is being produced in other arenas, not this one.

[vondur]

We saw this during the pandemic when everyone wanted to purchase bicycles. Shimano (they make bike transmission parts and brakes) saw a huge increase in demand. Shimano didn't want to invest into new factories as they assumed the demand was a temporary spike. I'm pretty sure this is what is happening currently with RAM, SSD's and processors. New fabs are coming on line, and Apple is looking at both Intel and Samsung to bring additional capacity online. If the AI boom dramatically slows, it's going to be interesting to see how the industry responds.

[wredcoll]

I don't get this, is there a world where we need fewer cpu/ram/ssds in the future?

Like, there's so many things that could benefit from a cheap processor involved in their operation, the growth seems effectively unlimited.

[bravoetch]

There's definitely a world where we need newer products, but not as many or as fast in iteration. My gaming PC has 128GB of RAM... And I built it years ago when RAM was laughably cheap. I still never touch the sides on it.

[wredcoll]

Ok sure, assuning your gaming machine lasts 5-10 years, what about everyone else who is born (or turns 18 or whatever) during that timespan?

[cptskippy]

I think I'm agreeing with you but its also not something easily dismissed. The DRAM Cartel has been found to be distorting the market on numerous occasions by various regulatory bodies. There is a boom-bust cycle that occurs with DRAM and Flash memory. The Cartel claims they always lose despite the fact that demand seems to always steadily rise.

The pandemic caused once such boom-bust that resulted in a rather large downturn in demand in 2022-2023 referred to as the pandemic hangover. During that time demand dropped following overspend during the pandemic and members of the cartel drastically cut production at times to keep prices above cost. Even after the demand recovery began in 2023, the cartel members were slow to increase production and made little to no investment in production capacity in 2024-2025. Creating a shortage.

The AI hype cycle has exacerbated the shortage by creating speculative purchases and then panic buying. Remember the shoe company that pivoted to AI?

So Cartel market manipulation is partially to blame for the over 100% increase in prices and the shortages.

[mrtksn]

It is a market failure as the markets fail to cater for the demand due to structural factors. It’s basically designing database structure that causes huge latency due to use pattern changes and you are not able to alter the structure because that will demand even more painful downtime and latency and the pattern may eventually change and make the alterations redundant.

[throw0101c]

> It is a market failure as the markets fail to cater for the demand due to structural factors.

The Market™ is perhaps going after higher margins. If you can charge $200 instead of $100 for a widget, why wouldn't you?

Ideally at some point someone will see the margins and be motivated to go after some of it and offer things for $190, but the ROI on upfront fab costs given market risks may not be high enough for the business uncertainly that needs to be taken (boom-bust cycles).

No participant in The Market is obligated to "cater" to demand if they do not think the juice is worth the squeeze.

[mrtksn]

That’s why it’s market failure, not some specific company failure

[tw04]

It’s market consolidation unchecked. How many nand suppliers are there in the US? How many globally? Now add the sanctions on China, and tell us how that’s a competitive market.

The reality is all the things we learned from the Great Depression have been forgotten, and half the voting public seems to champion monopolies while simultaneously acting dumbfounded that the end result will always be an increase in costs.

[paulnpace]

The demand side is the world's "investors" buying up a product without producing profit. This results in locking out companies operating without such "investors" from accessing the product and using it to produce profit. This is a failure.

[bigbuppo]

And it's exacerbated by the companies that have to invest their own Real Money to produce factories to make the chips. Same goes with the power utilities. Everyone knows it's a bubble and they don't want to be the one left holding the hundred billion dollar bag like back when Enron went belly up.

[paulnpace]

But they create a new problem for themselves of converting consumers into non-brand loyalty pure price hunters. I don't think I'm speaking for myself when I say I will use the other guy if it saves me a penny for the rest of my life.

The counter-example I hold up is Harley-Davidson. They could hardly pay a bill in the late '70 through the '80s. They'd even get free samples from suppliers and put them into production. They survived with very strong brand loyalty from customers and after-market companies.

Samsung sells directly to customers of all sizes, so they have a very good idea as to where products end up. Cutting the legs off of innumerable small businesses is despicable behavior.

I don't care if Samsung is literally starving to death, where I was previously at least a marginally loyal customer not even looking at other brands because prices were fine.

[einpoklum]

Supply, to a great extent, is a policy decision. Demand, to a great extent, a policy decision. This is not the silly metaphor of individual consumers and producers acting independently of each other.

[dheera]

It is market failure when normal people can't afford technology that they used to be able to afford.

[jandrewrogers]

This was avoidable. Over $100B of new production capacity in the US alone has been in the works for years. The usual "environmental and community concerns" lawsuits and activism that plagues building in the US has delayed almost every single one of these projects by multiple years.

NIMBYs and degrowth activists own this particular "market failure". The companies have been trying to invest in capacity ahead of demand but have been prevented from doing so.

[throwway120385]

I think it's really easy to blame one or another specific group for the "market failure" but the reality is that if there were 100B worth of capital looking for 1T worth of gross over 10 years there would be a lot of places that would welcome that kind of spending. I think it's probable that in specific places there's been push back, and those places are probably where the work was historically concentrated. But if that's the case, you should really be asking "why is there push back now when there wasn't before?" And I don't think the answer is because the entire community has adopted a "degrowth" agenda. Rather, I think it's going to be more about chemical dumping in the water supply or use of scarce resources that the community would rather not spend for the profit of a few people who don't live there.

I think a lot of people will accept industry when industry tries to be a good steward of the community's environment.

[jandrewrogers]

It is happening to production facilities across the US. Both new production facilities and expansion of existing facilities. The locale doesn't seem to make a difference.

As with the sudden inexplicable "concern" about data center construction, I don't think this activism is organic.

[dec0dedab0de]

As with the sudden inexplicable "concern" about data center construction, I don't think this activism is organic.

I don't think it is sudden, there was much of the same concern about Amazon warehouses and anything else that cuts down trees, disrupting wildlife, and human neighbors. The reason it is more of a concern with modern datacenters is because they don't come with a significant amount of new jobs for the communities they are affecting. People will put up with a lot if means their unemployed loved ones can get on their feet.

With AI being a looming threat to everyone's livelihood it is compounding the reaction, not only do these datacenters not provide new jobs, they are actively contributing to people losing their current jobs.

If these new datacenters were going into empty buildings in cities that already had adequate infrastructure, then no one would care. They would still be against ai in general, but the datacenters wouldn't be a problem.

edit:

They could probably get a ton of support if they went into one of the many cities with crumbling infrastructure, took over abandoned buildings, and paid to fix up the roads and stuff. Like if they moved into an abandoned factory in flint, and fixed the water supply they could be heros.

[overfeed]

You find populism in the US inexplicable in 2026? Where have you been for the past 18 years? You get instant political capital by framing anything as elites vs the common man, and the tech company billionaires cannot escape that "coastal elite" label, or hide that they want to build more data centers.

[overfeed]

Are the NIMBYs in South Korea blocking Samsung too? If not, then the root cause can't be that.

[ashivkum]

there is no serious degrowth movement in the US. absolutely delusional to pin anything, positive or negative, on them.

[epistasis]

Agreed on the insignificance of the degrowth moevement on seriousness. However there is a serious NIMBY movement, and the degrowth movement provides the moral cover for a lot of very selfish people that are not serious about degrowth but wish to accomplish the same goals for individual projects near them.

[mxfh]

You were not are renter in 2021 when NVMe were same price as now by TB, stuff is just becoming more expensive on market shortages.

Last half year ate up three to four years of earlier price regression, that's about it.

As long as this plateaus here, as prices did for last 4 months, that's just the new equilibrium where it has the chance to get better again, would no be all doom and gloom about personal computing yet.

[downrightmike]

The dollar is losing value, we cant hit equilibrium, it will always cost more dollars. And that is assuming the mfg are not price maximizing (they are).

[Aurornis]

> Market is forcing people to become renters than buyers and there is no force countering that idea.

The doomerism surrounding this topic is wild.

Gas prices have also gone up recently, but I don't see the same claims about how it's the end of personal vehicles, that the prices are never coming down, or that we're all becoming renters instead of buyers.

Saying that there isn't a force countering this is peak doomerism. New factories take a long time to build. These companies didn't have spare production lines waiting for demand to go up.

[hephaes7us]

If you don't see people talking about the "end of personal vehicles", it could just be that you haven't looked very hard.

It's intuitively obvious to a lot of people that the era of personal, wholly owned transportation is waning. A lot of people seem to miss the second clause of that old "you'll own nothing" phase, the part where most people are happy about it!

When vehicles drive themselves, and there's a large enough pool that one can show up pretty reliably within a few minutes of your needing one, how many people are going to choose to own when renting is cheaper and easier?

[sandworm101]

Because renting will likely never be cheaper. Maybe the occasional city dweller may see a profit, but those of us who spend hours in our cars each day will not.

[Jyaif]

Perhaps additional financial incentives for people to not spend hours of their day in cars is a good thing?

[lazide]

If this was really an economically viable plan, we’d all just take taxis everywhere.

And some do. Most don’t, for the same reasons self driving doesn’t matter.

[wredcoll]

It wasn't economically viable 20 years ago.

What about 20 years in the future?

[lazide]

It’ll be outcompeted by flying cars of course.

[BizarroLand]

Probably everyone that doesn't live in a dense metropolitan area, and anyone that can do the math that "Owning my vehicle for 100,000 miles costs an average of $0.50/mile compared to the $1+/mile getting a lift costs, and once it's done I still have whatever value remains in my vehicle"

[Aurornis]

> If you don't see people talking about the "end of personal vehicles", it could just be that you haven't looked very hard.

Or it could be that I mostly talk to people in the real world, and less so follow the echo chambers online that think "you'll own nothing" is a foregone conclusion about the future and fit their worldview to match.

[kjs3]

Ug. I picked up a 16TB hard disk last year for about $250. Went looking for another one last month and the same disk is about $500. Painful.

[Scoundreller]

At least the fun part with these situations is that the prices of old crap goes up and I can sell that old crap I have for actual $.

I remember selling some ancient GPUs that I was going to throw away during one of the previous booms.

[kjs3]

Indeed. Now...where did I put that pile of PC3 memory...

[didgetmaster]

When I upgraded my computer a little over a year ago, I got 128GB of DDR5 RAM instead of just 64GB. Glad I did.

I also thought about upgrading my gen4 SSD at the same time. It was still meeting all my needs, so I thought if I waited, I could get a bigger, faster one for cheap later. Mistake!

[ericd]

Are things too expensive now, or was that miraculously cheap because of a glut of supply relative to demand at the time? I think my first SSD was something like $600 for 160 gigs, one of those intel drives that came with a speed demon sticker, so let's appreciate what we have for a sec. Or we could go back to 5 megs of spinning rust for $thousands.

Things will normalize, semis are a boom and bust industry, and it takes a massive amount of capital investment to increase supply. Because of that boom and bust, the producers are wary of growing their supply to keep up in lockstep with demand, because they might end up with a glut that they have a hard time selling, and a large pile of debt from building out that glut. Semiconductors at the leading edge take very large, very expensive, very rube goldbergian machines to make them, and a very skilled workforce to make those work.

If this stuff stays this expensive/profitable, industry will grow capacity to boost earnings until they overshoot, there's not some grand conspiracy to make you rent everything. We're just in a massive dislocation right now because we've discovered this awesome new tool that's boosting demand by a ridiculous degree. Last year we were at ~$300B of capital investment in DCs in the US, this year it's looking like ~$750B.

[overfeed]

> If this stuff stays this expensive/profitable, industry will grow capacity to boost earnings until they overshoot, there's not some grand conspiracy to make you rent everything

Production cartels exist to prevent individual greed from "ruining" it for the rest of the group. OPEC does it in the overtly, memory manufactures do it covertly, and have been convicted of conspiring in multiple jurisdictions, on multiple occasions.

[ericd]

Good point re cartels. But I still don’t think there’s a shadowy group trying to make owning things impossible for normal people as an explicit goal.

[overfeed]

It's not a goal, but a secondary effect. Companies that build long-lasting products for sale to customers will have lower profits than those that rent-out cheaply made goods. Over a multi-decade window, with some bankruptcies, consolidation roll-ups and astute leadership, you can guess which model will win, based on nothing but market forces and imperfect information. The collusion is based purely on P&L performance.

[walrus01]

I remember buying a 80GB Intel SATA SSD (which was $450 USD at the time) and putting it into the DVD drive bay in a 2009 17" Macbook Pro. At the time there was no official SSD support, but there was an aluminum holder you could buy to remove the slimline slot loading DVD drive, and put a 2.5" form factor (7.5 or 9.5mm?) height SSD or HDD in its place. Was a huge performance increase for the OS/boot drive.

[Modified3019]

I just bought a few more Intel 310 Series 40GB mSATA ssd’s on eBay for $10 each. They are ancient and comparatively slow, but reliable and extremely low power, so much so they can be perfectly powered by a USB 2.0 port in an enclosure if needed, and don’t need a heat sink. My original 80GB version ($190) that I put in my W520 thinkpad in 2011 is still going strong.

Basically I like to use them as a cheap “better” thumb drive, putting ventoy on them with no concern for space, along with a fat32 partition for bios updates.

These along with a nanoKVM box my siblings can attach to the computers I built for them makes remote troubleshooting relatively painless when rustdesk isn’t sufficient.

[thelastgallon]

When people talk about AI investments of trillions of dollars, its never mentioned how high a price we are paying at a planetary scale in externalities. Billions of people are now paying a lot more for these components, memory, ssd, cpu; all these costs must be factored into the total cost of AI. AI companies are being subsidized at the expense of consumers. The current supply chains were built for consumer demand, which is hijacked by the AI grifters.

Same a consumers (car drivers) subsidizing businesses (trucks). Road damage is almost entirely caused by trucks, 4th power of weight, but the cost is borne by us.

[Adachi91]

True, I've been searching for 2 weeks now for components to get a PC back online. I suspect the VRM blew in my motherboard, and trying to find x570 or b550 old Gen tech is drying up because that's the only thing affordable. Meanwhile decent 3D cache CPU + motherboard combos afe going cheap because they can't move stock. The price looks nice but the second you add DDR5 RAM it is just a gut punch. Scalpers are taking advantage of this as well, as well as Chinese "Brand New" x570 motherboards listed as gaming consoles on Amazon.

This is the first time I've had a computer have a complete failure and no way to fix it as I look around at the used market and the latest generation market. I'm kind of just disillusioned.

[lostlogin]

So you pay for parts that are all very expensive due to AI in order to get the machine online so that you can pay for AI subscriptions to do work that is disappearing due to job cuts due to AI.

[giancarlostoro]

When I was 18 I was hoping we'd have 500TB hard drives by now.

[markhahn]

the interesting thing is that scaling laws (at least Moore's and the like) are complete lies. (Moore is fine if you treat it as a weak observation that shrinking features to half gives you 4x as many devices in the same area.)

what happens is that the industry goes through certain discrete technical upgrades. for instance, EUV in fabs, or GMR disk heads. none of these are really planned, none of them are exponential. and they usually interact with other phenomena (such as Dennard scaling).

in a sense, the phenomenon is more like "expectations are exponential, and this motivates manufacturers to schedule updates".

hard disks are still improving, arguably similar to how they have in the past, but there are limits to demand. the consumer market has mostly dropped out, for instance due to flash.

even in flash, there is no exponential scaling in devices. people got excited in the initial startup, when for instance, mature TLC is so much better than early SLC. but all that's over: it's both mature and we'll probably never see PLC. even QLC is interesting in that it illustrates that most of our storage is very cold.

[ndr42]

And you are now how old? 19? 79?

[giancarlostoro]

36 ;)

[nirav72]

Last fall I bought a 4tb Samsung 990 pro drive for $260. Now it retails between $800-900.

[naveen99]

Are you sure it’s the same ssd. The new nvme5 disks are 3x faster

[yieldcrv]

and 2TB SSD's in 2020 were expensive too, after dropping to lows late last decade

ebbs and flows