Valve Says The Companies Making RAM Give Them A Price And If They Say No, They ‘Never Talk To Us Again’
https://kotaku.com/valve-says-the-companies-making-ram-give-them-a-price-and-if-they-say-no-they-never-talk-to-us-again-2000709575Open linkView original on lemmy.today582
Comments125
I know it'd be expensive, but I wonder if it'd be worth it to valve to start producing ram. They've certainly got the money to get it started, they are getting heavy into hardware that they can use it in, and they could sell it as well.
I don't know if there's a shortage of raw material or if no one wanted to invest in more manufacturing when AI could crash within a short time.
In a nutshell this is impossible because of how the global supply chain works. Specifically how most of the hardware engineers/factories are in Taiwan, and how the technology to make chips is proprietarily owned by a company in Norway.
Like the whole reason China wants Tiawan in the first place is the same reason they can't just bomb them into submission... Their population of highly skilled hardware engineers that fundamentally make the global chips supply chain possible is impossible to replace.
AsmL is a dutch company...
Also ,i'm not sure if HBM requires the smallest nodes
No need, others vountries ram are emerging. Hope they start to get to techno. Even better if they copied it from US. I think they are at reliable ddr4, testing ddr5.
Manufacturing their own sticks would onlympush the problem to the price of RAM chips.
The resources it takes to start manufacturing modern RAM chips is such that THE ENTIRE FUCKING NATION OF CHINA is finally getting around to it.
I know Valve is a big company, but that's a pretty bite to chew and swallow.
My undiagnosed adhd brain: how difficult can in be
The actual process of creating semiconductors is basically:
In recent years, step 3 has gotten so complicated, based on needing to create radiation of exactly a particular wavelength of extreme ultraviolet light focused exactly on the silicon (and the mask/stencil above it), because that wavelength allows for the smallest possible features on the silicon. So they take purified tin, melt the tin into molten liquid, and ejecting the molten tin in a liquid jet downward into a vacuum at exactly the right speed to where it forms into droplets of the exact size for the machine (about 50 μm), then blasts each droplet, mid-fall, with a 1.6kW laser that heats it up so hot that it vaporizes and ionizes into plasma at the exact position where a system of highly polished and precisely positioned mirrors focuses the UV radiation evenly onto the silicon surface.
Oh, and the machine makes one tin droplet every 1/50,000 of a second, so in any given second it ionizes 50,000 droplets in the stream.
The machine costs something like $300 million, and requires full time experts to make sure that it's working correctly.
Everything else in the fabrication facility is similarly complicated, which is why a fab represents something like $30 billion in total costs over its lifetime.
Now is the time to do it for anyone that can. So much market share available to whoever gets there first.
Even Tsmc tried to make memory and failed. It's difficult.
They'd need to source the components outside of the increasingly monopolistic US-alligned group of hardware manufacturers. The only way you end run the Big Three is to go to... CHINA. And we've layered so many sanctions, tariffs, and putative measures on import of Chinese hardware that it would be a fool's errand to bother.
Even if there's an AI crash, the long-term outlook for chip demand only goes up. The problem isn't with the economic demand, it's with the provisioning of capital. For the most part, you need to spend tens - if not hundreds - of billions of dollars to start producing even the middle tier of nano-computing components in modern use.
I might suggest there's another way to tackle this problem. And it's one that Valve already is heavily invested in.
Lower resolution games. Lower hardware requirements. More efficient software engines. More games focused on the mechanics and story than the raw, realistic visuals.
You can run Doom on a pregnancy test and people still buy that game. Games like "Undertale" and "Vampire Survivors" do incredibly well in part because they are so accessible to anyone with a 15-year-old rig. Rather than trying to build a PS5-killer machine, you can go the Nintendo route and build a novel interface that runs on more basic components. Then you exploit the hell out of your Disney-esque IP without worrying that Halo: Remastered Delux Ultra looks better than the next iteration of Metroid Prime.
My understanding is that it’s the latter. AFAIK it takes something like 3-5 years to get a fab going if you already know what you’re doing, so it would not only be wildly expensive but you’re also gambling that RAM won’t come back down to a reasonable supply/demand in the next 5-10 years to break even on the whole process.
There’s also the fact that it wouldn’t really make sense for Valve unless they wanted to make a huge pivot in their whole business. Entry costs aside, manufacturing RAM is not really something a company can just do as a “side gig”. Valve is only like 400 people, so it wouldn’t be Valve just “starting to produce RAM” but rather Valve turning itself into a RAM manufacturer that also distributes video games.
You know i always forget how small valve actually is.
Can't wait to see how negotiations go once the AI bubble pops
They'll just continue with artificial scarcity until they get sued or fined or something but won't be enough to offset the profits
Their dilemma is whether to build more RAM factories, which would reduce prices, or not. Knowing when demand slows down would surely help them.
What's to stop them from just going a generation back and using DDR4 instead of DDR5.
There is no one who can convince me that it makes any noticeable difference anyway. When I was putting together a new/used desktop I specifically looked for DDR4 for precisely that reason and I would take any bet that a performance hit would be measured in numbers too small for any user to even notice.
Constantly needing newer hardware with only fractional improvements is the biggest scam in tech. They took their lesson from Apple and Samsung.
DDR4 isn’t much cheaper, and wouldn’t stay cheaper at all if demand spiked.
DDR4 prices have come up too. In fact, DDR3 and even DDR2 prices have spiked.
I don't think DDR4 is significantly cheaper. Plus, they would have had to go a CPU generation back too then and I think the AMD CPUs of that generation had way worse integrated graphics, so now you'd need a dedicated GPU as well.
They should also sell it with empty ram slots...
I'm sure a lot of people have a desktop with more ram than it needs that wouldn't mind sacrificing a stick or two for a steam machine in thier lounge, especially of they've switched over from windows 10 to Linux on their desktop...
Depending on your steam machine you get, it might have empty slots. I think one of the interviews said some will have a single stick of 16 and some two sticks of 8 just because the stock for RAM is so dumb they are taking what they can get.
I mean sell it with 0 sticks, but I also just realized it uses SODIMM DDR5, and I don't think many people have that just lying around 😅
I hope China floods the market with cheap RAM and absolutely destroys these scumbag memory companies.
Like they did with EVs in the US?
Republicans would probably make sure that can't happen.
They already preemptively had CXMT on the trade blacklist lol. Only got removed because of the intense shortage.
And you end up with the US getting hosed while the rest of us swim in cheap EVs.
The US would be the only country to suffer in this scenario. The rest of the world would be just fine with using cheaper memory while we shoot ourselves in the foot to spite them.
I'm sure they'll try to ban Chinese memory for "national security reasons" but the differences here are that memory is much easier to smuggle in, and even if not, them flooding other markets would free up more supply of other manufacturers enough that we should see major price drops anyway. They recently tried banning imports of foreign-made routers and that didn't seem to actually work out.
It will take maybe two to three years before China could do that. The cheap Chinese RAM manufacturers are only starting their production.
That's true, but after that point the capacity is there and it will be harder to constrain supply in this way after that. After China establishes a major memory player, I assume they wouldn't want to fall behind after that point either.
If they have the capacity to do that they would have already been doing it. Chip production is extremely expensive which is why there's only a few companies doing it.
Fingers crossed for the next 5 years.
Ah yes, the law of greed and demand.
I think legacy american market ram companies need to be blacklisted.
Once China floods the market, we need to put these fuckers out of business.
There is only one American memory company: Micron. Sk Hynix and Samsung are South Korean.
Everyone else who sells memory modules in the west gets the actual memory chips from one of those three companies. Beyond that there is only one company that makes the waifers that the chips are made from and I think its Dutch. Definitely European.
Is that what I said?
I think the wafer is dominated by the Japanese. The Dutch company you are thinking of is ASML and they manufacture 90% of the precision machines that manufacture chips in the world.
I feel like Valve would have been better off designing a new motherboard and discrete GPU design to facilitate cooling and smaller cases.
Make a new standard and allow any third party to use it.
They just wanted to make a new GameCube instead.
Yeah, because everyone agrees the price is too low and more engineering and manufacturing costs are needed to beef it up.
I’m talking about something that is closer to a true PC ecosystem than the locked-in underpowered overpriced DOA system.
If the price is going to be exorbitant the system might as well be customizable and not limited to AMD’s trash bin.
I'm curious what miniature graphics card were you thinking to put in
You’re asking me to create the design? I’m not an engineer.
I can tell you that PCs are generally a mess and are definitely limited by standards set decades ago.
That’s what Valve should be doing instead of making a $1000 PS4.
yeah, so the hardware does not exist yet. but valve is not AMD either, I doubt they have the money (yes) or the expertise to effectively become a graphics card manufacturer. probably they would have to come up with their own data and power sockets, and then it wouldn't be compatible with anything else, maybe a steam machine 2
That article is confusing, are they talking about the RAM chips themselves? Or the packaging(sticks)? Or both? Also without an ad blocker on a phone, that article is herpes. Why would anyone voluntarily read an article from that site.
😡
coupled with the fact that the cartels refuse to expand production; this tells me they're realistic about the moment - it's not going to be a decade of future humongous peak RAM consumption, because otherwise they'd be blisteringly stupid (to lose out on those potential increased sales)... https://www.tomshardware.com/pc-components/dram/memory-makers-have-no-plans-to-increase-production-despite-crushing-ram-shortages-modest-2026-increase-predicted-as-dram-makers-hedge-their-ai-bets
Micron has been building a new fab in Boise which is set to output RAM starting 2027, no?
https://www.kivitv.com/southeast-boise/everything-you-need-to-know-about-microns-massive-boise-manufacturing-expansion
Apparently another fab is planned already.
https://investors.micron.com/news-releases/news-release-details/micron-announces-groundbreaking-historic-new-york-megafab
Infineon is also looking to expand production, if I understand correctly, though RAM may not be their main thing.
https://www.stern.de/gesellschaft/regional/sachsen/chipindustrie--halbleiterproduktion--infineon-ist--ready--fuer-wachstum-37531970.html
yeah this is kind of the pattern with ram price fluctuations.
Ram demand goes up.
Ram prices go up.
Ram makers say they'll increase capacity.
Nothing happens, they may open new factories but close older lines, or they may start to open another fab but then for whatever reason it doesn't work.
Ram prices go up.
The decision to build the new Boise fab in question (to start production in 2027) was made in September 2022. ChatGPT was made available to the public in November 2022. The new fab is likely not a response to significantly increased demand at the time but an investment made in expectation of increased demand (GPT-4 could already be tested in 2020, maybe they foresaw the LLM hype). They make DRAM. Isn't it likely that prices are going to drop once production starts at the new fab?
https://investors.micron.com/news-releases/news-release-details/micron-invest-15-billion-new-idaho-fab-bringing-leading-edge
None of the fines for these things are enough. It should be, like, the company is nationalized. The leadership is sentenced to years of community service and barred from working in the industry for life.
Fucking corporate America. I was fired for having a disability, specifically and intentionally by my boss and her manager. Neither has any direct accountability - both were terminated as a result of the findings of a federal and state investigation, but the company will pay for the damages. They both failed upward, getting higher positions at other companies, while I've struggled to find employment, something already difficult due to the stigma of my age, disability, and gender, but now with word of my termination having spread through the quite small pool of people who work in my field.
Uuugh, fuck that! I am so deeply sorry. I'm disabled and of an age and gender that get heavily discriminated against, too...so I feel you. I've been there. It's so awful and makes you feel like shit. I sincerely hope things get better for you ASAP! Here's some Internet hugs, if you want them: 🫂
Probably only gotta do that once for things to really change
You gotta give a booster shot every once in a while to remind them.
Oh wow, reading the wiki you linked, looks like that one exec really learned their lesson \s
edit/update: Oh, wow so Sun Woo Lee actually really lucked out as Korea focused more on making an example of the Samsung heir apparent https://en.wikipedia.org/wiki/Lee_Jae-yong
8 months in prison sucks, I totally concede that. Yet literally the deal they made looks like they were asked "Would you take the fall and go to prison for 8 months and then get paid millions per year afterward?"
Going to jail as a poor person means you lose your job
Going to jail as a rich person apparently gets you a promotion
Interesting
Not just lose your job, but your entire career as the prison record will come up in your background check and the news will also be on the internet forever, the prison / slavery industry is a well oiled machine
That means that he managed to keep the fine small enough that Samsung made significantly more money off the price fixing than they ever lost from the fine. Hasn’t changed
https://www.axios.com/google-facebook-fines-profits--134d3567-1052-4d9d-aa70-dc7c25ed4ebf.html
Cost of doing business really
Doesn't the mob and other syndicates do something like that as well? Gotta do some time and not snitch to move up in the ranks.
"They gave their freedom for this company!" - Some corrupt executive somewhere
Valve: "May we buy some RAM, good sir?"
RAM Companies: "Sure. How much you willing to pay?"
Valve: "$30?"
RAM Companies: laugh "Get the fuck outta here, loser!"
It's related to the AI bubble. The AI companies are trying to make it as difficult as possible to get a good PC, because they know they're cooked if the general public has access to systems that can run AI models locally, so they're buying everything up as fast as they can in the name of data centers that will never be built.
As soon as the first one fails, it's all over. Prices will tumble and memory makers will come crawling back to Valve (and other hardware makers) begging them to buy.
Once the US economy craters into the recession it should by all rights currently be working through... Oh I am sure at that point there will be all sorts of companies dumping all sorts of things into every market they can to try to survive.
The AI bubble bursting will fuck the world in ways that will take decades to unfuck. If sanity was even slightly fashionable right now governments around the world, especially the US would be using every power they had to put some limits on this whole mess. Regulation, taxation, environmental controls everything would be on the table.
Instead we seem to be racing at the wall as fast as we can with NVidia and co in the driving seat, and governments around the world in the passenger seat screaming "Go! Go! Go!"
That's OK though, economic turmoil is felt by the individual based on their starting wealth. The rich often manage to become wealthier, it's the poor who get buried. Yay capitalism.
Let's not forget that almost all memory is made by a cartel of 3 companies known for price fixing. They're all being as slow as possible about increasing production capacity.
Is that not for good reason though? Only for them really, but if they did ramp up production and then the bubble pops... I wish they would ramp up production, it's just easy to understand why they won't.
If there is a demand for ram, which there is in the consumer market, then it shouldn't be a risk. If DCs get cancelled, then they should have contracts in place for at least a minimum buy, which should offset cost risk. If they don't have that, then that's just shitty business. Even still, they can just as easily slow down production if needed. If the bubble pops, either they'll have inventory that the world will buy and they can throttle back prod, or they don't have inventory and they will have to throttle prod anyway since demand for DCs as a whole has to be more than just the consumer market.
Idk, it's probably just the cynic in me, but I think it's likely this is just manipulation of the prices, especially given the history of these companies doing just that.
They definitely have contracts that ensure the ai companies buy the ordered amount.
However building new production factories is expensive as fuck. They know they need to do that. But why buy a factory for billions and sell RAM at a lower price when you just don't spend billions and earn even more with less RAM
Because if you don't do everything possible to continuously improve your business, others may catch up with you
Hah. That's the point where a good cartel comes in and ensures that this is not the case.
Yep. Just like how nobody uses Windows since Linux is easily accessible.
Wait
It's not the average consumer spending thousands on tokens. Even my work just had a meeting about how "the free lunch is over" now that AI costs are expanding, and they bought their own hardware to investigate hosting local models.
Linux is widely used in the enterprise world. It's the home consumer world that doesn't use it as much and even that is rapidly changing as things enshitify.
What are you talking about?
The general public adopting open tech themselves instead of using corporate options
Was that not clear?
Having an option vs not having an option
Also Linux and Windows are pretty different in use cases and capabilities. Meanwhile, local AI models have a very similar user experience. If hardware was cheaper and people could run better LLMs locally, they wouldn't pay monthly for it.
You're right, the general public doesn't use Linux due to the lack of ability to browse the web and file their taxes—Windows exclusive functionality.
In the workplace, there are still a lot of domain specific programs that don't have Linux support. Companies don't have much of an incentive to port that stuff over. As for the people who just need a web browser, they probably would use Linux just fine if they could buy a computer at BestBuy that comes with Linux preinstalled
Compare that to LLM programs, where it's a matter of "download this app instead of that one, because this one is free and that one costs $25 a month"
So maybe try to remember that after the AI bubble burst, and there is more RAM than customers, and it's the customer that sets the price.
I'm starting to think more and more that the only way to pop the bubble is the Luigi Style.
I think that would feed the hype machine.
This is crazy... But it's true.
Knowing Sam Altman, he might have a plateu of plans to keep the bubble from bursting. Him going will mean the bubble will have one week at top.
But... þere are still so many insurance executives in þe queue.
If you disagree on valve share in publishing a game on steam it would pretty much be the same story. Valve is a for profit corporation whos ceo own an entire fleet of mega yachts, they are just as shit as any other corporation.
I can always just not publish on Steam. There are other options.
What's happening here with RAM is a cartel
I seriously don't get this constant "Valve is a monopoly, end them" bull crap. Yes they're a business. Yes they make money. Sure they've got flaws we should tackle. But they aren't out there trying to shut itch.io down or using legislation to stop you from hosting the game yourself. GOG and Epic aren't as popular because they don't provide a strong enough product to pull people away.
It's hard to believe that it's just a RAM issue.
Valve is going full Apple with the SSD upgrade. They're making a healthy profit from each system they sell.
It's both RAM and storage price. A 2TB NVMe cost upward of 300$ CAD.
Did you for get that when they upgrade the storage to 2TB they do not also include the 512GB storage included in the low end model?
Could be said for literally every single product ever made, come back to reality, holy fucking shit dude.
Valve is making a bad deal worse. By being needlessly greedy.
I am in the reality where all the other gaming consoles massively outperform it while costing hundreds less and also providing a controller.
Do you have any experience in product development? They went through a design process and unfortunately for them, when came time to choose a storage and RAM solution, they had to do it through the current price crisis.
So they either had to table the design and lose their development money or go through with it with the current storage and RAM cost.
Does it matter if I have experience in product development? Do you?
A product has to justify its cost. This one does not.
You can DIY or buy a pre-built that massively outperforms Valve’s console.
Yes I do have experience, in fact it's core to my job.
The cost to design is significant and wasting a few years of development is not a light decision. So Valve either had to scrap the design and waste the development cost, or price it according to the current PC parts prices
You are right that people can DIY, but it always was an option and people still buy ready-made computers, so that's a moot point.
The price for comparable parts and same form factor isn't far off from DIY.
Why shouldn't they? Margins are going to be tight btw, so they're really not. What they're really selling is a vehicle for Steam.
BTW, try putting together a same or better spec build yourself and get back to us with the cost.
They're also trying to make Steam OS available to install on any PC, so any argument of "AlL tHeY tHiNk AbOuT iS pRoFiTs" goes out the door there. I think the only struggle right now is getting it to work with NVidia graphics cards or something.
You can easily make a better pc for cheaper. Plenty of reviews showed this.
For like $50-$100 cheaper. And they all ignored the small form factor which could easily cost that.
You can build and buy a pre-built PC that easily outperforms the Steam console.
that does not make sense. you are not building a pre-built, because then its not a pre-built. is the sky cloudy over there?
I meant that pre-built or DIY are both better deals. I realize now that I should have been more clear.
This Steam console is bad when discussing performance and value. It has a nice design.
oh, yes that makes sense
Because they are a for profit company with a billionaire ceo. Making profits it's their job.
The price you pay for something in a store is not the same price valve pays for a stock of parts. They buy the same stuff for a lot cheaper and resell it at an higher price to make profits.
No Gabe, you fucked up with these price hikes. Don't blame the supplier.
The ram in the system went from 200 dollars to 600 dollars. Not increasing the price of the console by 400 dollars would have meant scrapping it instead.
There is literally no choice, the ram would have been sold either way, just to someone else instead.
Are you...stupid?
Yes.
Valve and its ceo decides the price of their products. Considering valve is a corporation making billions and the ceo owns an entire fleet of mega yachts, arguing that they are directly to blame for the high prices doesn't sound stupid at all to me. If they are literally swimming in billions their profit cut is high.
Really? The cost of components getting jacked by a supplier is their fault?
If you really are going to make that claim, you simultaneously lose all credibility by admitting that you are literally arguing in bad faith.
Shut the fuck up.
....in the universe you live in, is there cheap ram?
can I send you money for some please?
Private yachts aren't cheap either. To buy an entire fleet of these you need to boost your profits as high as you can.
so gabe fucked it up by buying a yacht years ago, when ram was cheap, somehow boosting up 'profit' on this margin machine?
my god you're fucking silly
So they should fund your gaming habit?
Yeah that's annoying and all, but it doesn't fundamentally change how capitalism works.
The component price changed, what was Gabe supposed to do, start manufacturing its own RAM?
That would be amazing timeline
Dreaming about Pipe RAM by Valve.
They are swimming in billions, they could easily lower the profits they make and give it away for cheaper but that's not their goal.
What do you think the margins are on this thing? You know how much the components cost, it's not hard to figure out about how much it costs them.
Profit margins on consoles are razor thin already, and that's before the skyrocketing price of components.
I'm sorry if that means your mom can't afford to get it for your birthday now, but it is what it is unfortunately.
Its worse than that, if they were to do a Microsoft or Sony and sell it at a loss to try and make money back on the games, then what would happen when they sell through the batch they currently have of presumably pre "BiBi and Donnys special visit to Iran" costed units, then what?
Suddenly all the other components are spiking in price, the pcbs and the plastic cost more, the packaging is more expensive, and they are forced to raise their prices. The sound of screeching from the terminally online intensifies as a bunch of "experts" declare that Valve can afford to lose money because Gabe isn't walking around in a barrel Diogenes style.
As a software company in the hardware industry Valve are a lot further down the chain than the bigger names, they aren't securing super long term contracts with anyone. They don't dictate terms. I doubt they are making a ton of money on any of their hardware, they are just trying to nudge the market in the right direction. We are going to see so many knock off steam machines in the next few years, Microsoft will keep releasing targetted versions of Windows to try to smother SteamOS, its a great time for the rest of the gaming ecosystem while AI fucks the hardware side.
I'm sorry, do you have any awareness of the world past your nose?
Yep. You are owed everything, after all. You deserve it.
He really shouldn't have dumped trillions of private and public money into AI. Thanks Gabe /s