Part of the problem is the constant "tight supply" excuse that seems to pop up annually to justify price increases. From the outside looking in, when multiple segments of a market experience "tight supply", it looks like 1 big conspiracy. When said supply restraints suddenly affect a market that's reportedly in decline as drastically as has been seen over the last several months, people are more inclined to start thinking about conspiracies. RAM shortages GPU shortages Wafer shortages Those are 3 major shortages....and all cropped up over the last several months. All 3 directly impact the PC market, raising prices. The PC market is reportedly shrinking. That means companies look for reasons to raise prices to maintain or increase profits to ensure shareholder satisfaction. What's the easiest way to justify a price hike? Supply shortage....

Cryio:

GPU shortage due to mining => Increase in price GPU shortage due to ram modules => Increase in price RAM shortage due to ram modules => Increase in price CPU shortage due to wafers => Increase in price The only thing needed now is for something to happen to nand flash to skyrocket SSD prices as well. We truly are in the darkest days of PC gaming. (though Ryzen CPUs are still amazingly fast for great prices still)

Yeah sure, that's going to save us all! Game only on your Ryzen CPUs! 🙄;) On a more serious note, I tend to believe this is all BS and "fake news", no shortages at all. For such a business with money behind it, local governments always prioratize such a company. To be honest, I even would believe they'd help that company more than 10 families not having properly processed drinking water if something told me that. I guess @sykozis is right, a "shrinking" market makes them see their revenue decrease, so they are trying to up the profit margins. Probably the only "truth" behind it.

fantaskarsef:

Easily explained: people don't want to pay more. I'm surprised you need one to point that out since the rest of your post is actually quite reasonable.

This is most likely the actual reason. It still makes me mad that they jump to such ridiculous conclusions.

anxious_f0x:

As someone who works in the industry of semiconductor Crystal growth, I can tell you that the whole process of growing crystals with enough in spec material really isn’t easy, it’s a dark art growing these things and then there’s the process of cutting and polishing the wafers that can lead to further loss of good wafers. On the plus side a couple of good runs can put you right back on track.

^THIS. If more consumers got to see first hand how their products are made (especially in the semiconductor industry) I guarantee they would never ever complain about high prices ever again. They would be astounded that a modern cpu can be bought for under $10,000.

Silva:

Supply and Demand works well to set prices. I have no problem with prices rising from high demand. The REAL problem is that they make profit from said rising prices, and don't extend the production lines. By keeping the money on their pockets, they choke the market, evolution and the less fortunate that can't afford the rising prices. If they invested on more fabs, they could make more money (on the long term), cement their market position as bigger companies and help poor people afford the products by keeping the price low. It's just pure greed. HDD's I understand, it was a natural disaster. The price has come down a little since. DDR4 I half understand, putting 512Gb on phones is fucking stupid for a girl to take pics on her new iphone but whatever. Why not use the extra profit to build new or re-qualify old fabs?

That's literally what they are doing. As an industry they spent 30 billion dollars just last year on this. And this number has been going up by about 20% a year which is insane. Once we break 10nm fabs are going to be insanely expensive since we will have to start shielding from quantum tunneling at the dielectric level. When a shortage exists prices go up and the industry uses the extra revenue to up production until the shortage no longer exists. This allows the business to make more money while also better filling the needs of the market. This process takes time but we saw it happen with HDDs and we are already starting to see it happening with RAM. We will start to see it happening with cpus too soon. I hate to be rude but come on, didn't any of you guys at least take an econ. class in college?

Prince Valiant:

Why do you think that capitalism is about screwing the customer and sucking up as much money as possible? There are laws that try to prevent that for a reason.

This is literally just supply and demand. Supply goes down or demand goes up and there is a shortage that raises prices. Why is it always about "screwing customers" anytime prices on anything go up? Are there really no other explanation as to why prices of any goods would ever fluctuate? Do you really believe that? This has nothing to do with anti-trust laws so I don't know why you're bringing that up. I'll repost my original questions since it's still relevant now: "Are they supposed to NOT raise prices when the product demand goes up so that the shortages get even worse while they lose money? Should they just stop building fabs so that their competitors pass them and they go out of business that way you can temporarily see $2 lower prices on your cpus?"

sykozis:

Part of the problem is the constant "tight supply" excuse that seems to pop up annually to justify price increases. From the outside looking in, when multiple segments of a market experience "tight supply", it looks like 1 big conspiracy. When said supply restraints suddenly affect a market that's reportedly in decline as drastically as has been seen over the last several months, people are more inclined to start thinking about conspiracies. RAM shortages GPU shortages Wafer shortages Those are 3 major shortages....and all cropped up over the last several months. All 3 directly impact the PC market, raising prices. The PC market is reportedly shrinking. That means companies look for reasons to raise prices to maintain or increase profits to ensure shareholder satisfaction. What's the easiest way to justify a price hike? Supply shortage....

It's not a "justification" if there is tons of data from different sources showing that the shortage is in fact real. A justification would imply that the shortage was made up as an excuse. I know that nobody wants it to be real but that doesn't change the facts.

NaturalViolence:

It's not a "justification" if there is tons of data from different sources showing that the shortage is in fact real. A justification would imply that the shortage was made up as an excuse. I know that nobody wants it to be real but that doesn't change the facts.

Where the "democracies" are not ruled by big corps interests some really strange things happen....:

China’s National Development and Reform Commission (NDRC) is looking into the possibility of DRAM price-fixing between the major memory and Flash suppliers, with specific interest from the Pricing Supervision Department of said commission. An official from the regulatory body, Xu Xinyu of NDRC, stated the following: “We have noticed the price surge and will pay more attention to future problems that may be caused by ‘price fixing’ in the sector.” This comes following recent reports that Samsung initiated plans to increase supply by 20%, which still failed to meet rising demand. The NDRC told the China Daily, a state-run media outlet, that the NDRC has paid attention to DRAM pricing and demand over the past 18 months, and that memory suppliers are now under the eye of the NDRC. There are only four major suppliers in the industry, and those include SK Hynix, Micron, Toshiba, and Samsung. Samsung has allegedly already had “conversations” with the NDRC, according to Wang Yanhui, Secretary-General of Mobile China Alliance. At this time, no actions have been taken against the memory manufacturers, but the possibility of price fixing is being investigated. Most of the memory shortage has the finger pointed at mobile phones, which have driven-up demand for both NAND and DRAM. The effects, of course, are wide-reaching, and even impact relatively “small” industries like PC gaming. We’ll stay on top of this story as it develops. Source: Reuters, the China Daily - Steve Burke

https://www.Disney.net/industry/3186-chinese-government-investigating-dram-price-fixing-allegations Edit: Source is "banned" from here LOL Let's try another: https://www.kitguru.net/channel/generaltech/matthew-wilson/chinas-economic-regulator-is-investigating-dram-and-nand-price-fixing/ Yes ,this one is not banned...yet. Just in case there is another one, i guess REUTERS is not going to be banned as source any time soon: https://www.reuters.com/article/us-china-chips/china-regulator-flags-greater-scrutiny-on-chips-after-price-surge-idUSKBN1EL017

Cryio:

GPU shortage due to mining => Increase in price GPU shortage due to ram modules => Increase in price RAM shortage due to ram modules => Increase in price CPU shortage due to wafers => Increase in price The only thing needed now is for something to happen to nand flash to skyrocket SSD prices as well. We truly are in the darkest days of PC gaming. (though Ryzen CPUs are still amazingly fast for great prices still)

You were saying... http://www.guru3d.com/news-story/samsung-power-outage-causes-up-to-60000-wafers-damaged-for-nand-flash-memory.html

NaturalViolence:

This is literally just supply and demand. Supply goes down or demand goes up and there is a shortage that raises prices. Why is it always about "screwing customers" anytime prices on anything go up? Are there really no other explanation as to why prices of any goods would ever fluctuate? Do you really believe that? This has nothing to do with anti-trust laws so I don't know why you're bringing that up. I'll repost my original questions since it's still relevant now: "Are they supposed to NOT raise prices when the product demand goes up so that the shortages get even worse while they lose money? Should they just stop building fabs so that their competitors pass them and they go out of business that way you can temporarily see $2 lower prices on your cpus?"

Perhaps because it's an industry where such things are common? "The Taiwan-based company generated net profits of NT$3.29 billion in the first three quarters of 2017, up 196% from a year earlier, with EPS reaching NT$8.06." If a near 200% increase in profit is supply and demand and doesn't look remotely suspicious I don't know what to think. Consider that this is on top of almost everything else creeping up in price so it shouldn't be a surprise when people are distrusting. Edit: I have no issues with companies being profitable and I don't demand anything of them.

Prince Valiant:

If a near 200% increase in profit is supply and demand and doesn't look remotely suspicious I don't know what to think.

Translated to US dollars they went from $38M to $112.8M profit over $1.58B revenue...and that's supplying over 1/6th of wafers to a $400B+ annual revenue semiconductor market. Imagine if they were doing a bit worse before, then they'd have a 10,000% increase in profit, just by being profitable at all.

NaturalViolence:

It's not a "justification" if there is tons of data from different sources showing that the shortage is in fact real. A justification would imply that the shortage was made up as an excuse. I know that nobody wants it to be real but that doesn't change the facts.

There's also tons of data from different sources showing a shortage in DRAM supply.... However, China is investigating price fixing in the DRAM market because even they suspect that the "shortage" is manufactured and not genuine. When there's only a handful of companies in a given industry and no oversight of said industry, it's easy for those companies to manufacture a product shortage to justify price increases. China suspects that SK Hynix and Samsung are engaging in price fixing and intentionally shorting supply to justify increased prices. It's not hard to believe that the same thing is taking place here. I mean, lets get realistic here. First was the DRAM shortage. Then there's a GPU shortage. Now there's magically a wafer shortage? There's no reason a wafer shortage should exist in an industry that should be expanding rapidly. As more things become computerized, wafer production HAS to increase. According to these companies, we've already exceeded the wafer supply rate. Why haven't they expanded to account for the increase in wafer demand?

Prince Valiant:

If a near 200% increase in profit is supply and demand and doesn't look remotely suspicious I don't know what to think..

That's pretty common in the semiconductor industry for supply shortages. I'm not sure how that proves the shortage isn't real or the companies are part of a conspiracy.

sykozis:

There's also tons of data from different sources showing a shortage in DRAM supply.... However, China is investigating price fixing in the DRAM market because even they suspect that the "shortage" is manufactured and not genuine. When there's only a handful of companies in a given industry and no oversight of said industry, it's easy for those companies to manufacture a product shortage to justify price increases. China suspects that SK Hynix and Samsung are engaging in price fixing and intentionally shorting supply to justify increased prices. It's not hard to believe that the same thing is taking place here.

Could they? Yes, it's possible. Is that proof that they are? No, that would be an assumption.

sykozis:

I mean, lets get realistic here. First was the DRAM shortage. Then there's a GPU shortage. Now there's magically a wafer shortage?

Do you really think crypto mining taking off is part of the conspiracy too? Come on, let's get real here. These are caused by different events. There is nothing you can use to connect them so why are you trying to do that?

sykozis:

There's no reason a wafer shortage should exist in an industry that should be expanding rapidly.

Actually there is a very good reason. Wafer quality is going up at the same time that demand is exploding. You can expect more shortages in the future as a result. It's also important to note that these shortages are only effecting certain types of wafers. I don't like when people make assumptions like this. "There is no reason". Really? Did you try asking someone who works in the industry or did you just assume that?

sykozis:

Why haven't they expanded to account for the increase in wafer demand?

Because it's phenomenally time consuming, expensive, and hard? They have been and continue to expand. They just aren't expanding quite fast enough for certain wafers. I don't know why everyone thinks these companies can just press a button and make certified facilities appear and start pumping out perfect products at high yields. If you talk to some of the people working in these industry and see what they do you'll quickly realize that it's just not that easy.

NaturalViolence:

I don't get this kneejerk reaction this community has to any news like this being part of some global conspiracy against consumers. How exactly do you guys think capitalism works? Are they supposed to NOT raise prices when the product demand goes up so that the shortages get even worse while they lose money? Should they just stop building fabs so that their competitors pass them and they go out of business that way you can temporarily see $2 lower prices on your cpus? Seriously, why does any news about prices going up on anything immediately create this type of reaction anywhere online.

Bunch of commies all of them. (Only difference I admit of being one 😀 ) They'd have no problem with someone setting the maximum GPU price. To hell with the company, its expenses and its future. But if you propose the same for water or for bread, they'd be liek: DAFUQ, THIS NO SOVIET RUSSIA. WE HAVE TO LET THE MARKET TAKE CARE OF THAT!