Except by the time they do that there are already new Chinese competitors selling those components to their old customers.
Chinese RAM is already out and being tested. How long before they have viable products in the marketplace? Especially considering that they aren’t really competing with anyone at the moment. Do you think people are going to suddenly switch back to spending 4x as much for American RAM once they are already happy with using this new shit?
How long before its processors and video cards?
You don’t get customers back after you exit an industry unless you are offering a competitive price or something that no one else is offering.
That’s a definite possibility. But the op proposed that PC component vendors stock would drop and therefore no one would build PC parts.
Chinese companies could fill the void if Samsung, SK Hynix, and Micron are slow to switch back. But there is no situation where companies simply stop taking money. However I believe that after the bubble pops, ram prices will not go back to the same price they were last year. Everyone will have to pay more and Chinese companies will be happy to take that extra money too.
I want you to think about these two statements that you made:
But there is no situation where companies simply stop taking money.
But the op proposed that PC component vendors stock would drop and therefore no one would build PC parts.
These cannot both be true. PC Component vendors will NOT stop selling parts and customers will NOT stop building PCs because that is leaving money on the table. They will source components from whoever will sell them at whatever price they can get. That is what WILL happen.
The problem is that the current production is for stuff that can’t really be used as consumer equipment.
If enough of the world’s component production capacity is dedicated to AI specific components, then when the bubble pops there won’t be anything to sell to consumers for months which could cause the manufacturers to go under.
Not if they’ve bet the farm on income from AI hardware sales.
The agreements being made aren’t for existing stock; they’re for the total future production capacity. If the manufacturer produces a shit ton of AI hardware and the bubble pops, they’re left with unusable inventory and nothing left to put on shelves. It’s a fundamental flaw in JIT manufacturing.
This isn’t excusing anything. The manufacturers are being extremely short sighted to the point of negligence and it’s probably going to backfire on them. But if they go down it’ll greatly impact consumer hardware production, likely for years.
If shares drop enough, another company with cash on hand buys them.
Shares aren’t revenue. The bubble pops, investors lose money, companies go back to selling PC components.
Except by the time they do that there are already new Chinese competitors selling those components to their old customers.
Chinese RAM is already out and being tested. How long before they have viable products in the marketplace? Especially considering that they aren’t really competing with anyone at the moment. Do you think people are going to suddenly switch back to spending 4x as much for American RAM once they are already happy with using this new shit?
How long before its processors and video cards?
You don’t get customers back after you exit an industry unless you are offering a competitive price or something that no one else is offering.
That’s a definite possibility. But the op proposed that PC component vendors stock would drop and therefore no one would build PC parts.
Chinese companies could fill the void if Samsung, SK Hynix, and Micron are slow to switch back. But there is no situation where companies simply stop taking money. However I believe that after the bubble pops, ram prices will not go back to the same price they were last year. Everyone will have to pay more and Chinese companies will be happy to take that extra money too.
I want you to think about these two statements that you made:
These cannot both be true. PC Component vendors will NOT stop selling parts and customers will NOT stop building PCs because that is leaving money on the table. They will source components from whoever will sell them at whatever price they can get. That is what WILL happen.
The problem is that the current production is for stuff that can’t really be used as consumer equipment.
If enough of the world’s component production capacity is dedicated to AI specific components, then when the bubble pops there won’t be anything to sell to consumers for months which could cause the manufacturers to go under.
Yeah, but the odds of them just being allowed to fail like that are basically nil.
They’ll retool and start making what’s profitable.
That takes time and money, though.
Well I bet they have both of these.
Not if they’ve bet the farm on income from AI hardware sales.
The agreements being made aren’t for existing stock; they’re for the total future production capacity. If the manufacturer produces a shit ton of AI hardware and the bubble pops, they’re left with unusable inventory and nothing left to put on shelves. It’s a fundamental flaw in JIT manufacturing.
This isn’t excusing anything. The manufacturers are being extremely short sighted to the point of negligence and it’s probably going to backfire on them. But if they go down it’ll greatly impact consumer hardware production, likely for years.