Alternative distribution to optical disks : SSD, cards, and download*

[eastmen]

MS has a large number of patents and engineers on staff , they are actively developing both software and hardware tech. If a memory company could benefit from any of that I don't know , that would have to be for them to decided. Nintendo has large amounts of money (like MS) and could of course bring that to the table for R&D and fab capacity.

As for Sony I was responding to Mr Fox pointing out that the xdr company lost billions . But that is what sony has done for the last half a decade + . Cell utterly failed and Sony invested billions into fabs to build cell that they sold off for a song and dance and the ps3 itself was a failure compared to their past consoles along with the failing pc business , failing tv business and other failures of sony from the last few years. Its not joint ventures that are bad , its sony's own choices to invest in niche products that don't have the demand that nand would have.

 

[MrFox]

You think making your own memory is somehow more profitable than buying it from the large suppliers. It's not a rational point of view.

Why didn't sony make their own gddr5?
Why didn't microsoft make their own 2133 DDR3?
Why didn't nintendo make their own 1t-sram?
Why doesn't apple, with the largest memory demand in the world, make their own memory?

They sure would like to, but it costs less to buy it on the market. The alternative argument is that the engineers at these companies are all stupid, and they didn't think about building a fab to get memory for free. They're all idiots!

 

[eastmen]

You think making your own memory is somehow more profitable than buying it from the large suppliers. It's not a rational point of view.

Why didn't sony make their own gddr5?
Why didn't microsoft make their own 2133 DDR3?
Why didn't nintendo make their own 1t-sram?
Why doesn't apple, with the largest memory demand in the world, make their own memory?

They sure would like to, but it costs less to buy it on the market. The alternative argument is that the engineers at these companies are all stupid, and they didn't think about building a fab to get memory for free. They're all idiots!

Why does Samsung make their own ? Why did they rush to be the first 3d nand supplier ? Because it allows them greater profit on their products and when selling to other companies.

Samsung makes almost everything that goes into their phones.

Why has apple spent years trying to move away from Samsung as their supplier ?

 

[Lalaland]

Why does Samsung make their own ? Why did they rush to be the first 3d nand supplier ? Because it allows them greater profit on their products and when selling to other companies.

Samsung makes almost everything that goes into their phones.

Why has apple spent years trying to move away from Samsung as their supplier ?

Eastmen you have this 100% the wrong way around, Samsung is a semi-foundry that expanded from making DIMMs into making NAND and then latterly into making consumer devices. In other words Samsung already had the expertise to run a fab and the customer contracts for their products (useful if a product flops and you have a rake of leftover NAND) before they became their own customer with phones et al. Samsungs latest plant in Xian is estimated to have the capacity for 100,000 300mm wafers a month, that is far, far in excess of Samsung's needs but you don't build a smaller capacity plant or you're locking in extra cost per chip for the functional lifetime of the plant (versus the spot market let alone contracted chips).

Neither Sony nor MS in their wildest dreams could consume the volume of chips a modern, cost-effective fab can produce so either the cost of NAND drops on the contract market or SSD console storage isn't happening (or another tech emerges to make solid state dramatically cheaper). 'Real men have fabs' was the apocryphal statement by Jerry Sanders the former head of AMD, guess who is now fabless and better off for it?

 

[Deleted member 11852]

Why does Samsung make their own ? Why did they rush to be the first 3d nand supplier ? Because it allows them greater profit on their products and when selling to other companies.

Samsung are in the fabrication business and making different types of ICs leverages the infrastructure they already invested in. Diversification is critical in the fab business. If you look at RAM fabrication you'll see it's incredible volatile and the market is fiercely competitive with more busts than boom. But if you're making ICs already, RAM is a relatively easy add.

 

[MrFox]

The fabs capacity of the giants is an eye opener.

 

[eastmen]

Eastmen you have this 100% the wrong way around, Samsung is a semi-foundry that expanded from making DIMMs into making NAND and then latterly into making consumer devices. In other words Samsung already had the expertise to run a fab and the customer contracts for their products (useful if a product flops and you have a rake of leftover NAND) before they became their own customer with phones et al. Samsungs latest plant in Xian is estimated to have the capacity for 100,000 300mm wafers a month, that is far, far in excess of Samsung's needs but you don't build a smaller capacity plant or you're locking in extra cost per chip for the functional lifetime of the plant (versus the spot market let alone contracted chips).

Neither Sony nor MS in their wildest dreams could consume the volume of chips a modern, cost-effective fab can produce so either the cost of NAND drops on the contract market or SSD console storage isn't happening (or another tech emerges to make solid state dramatically cheaper). 'Real men have fabs' was the apocryphal statement by Jerry Sanders the former head of AMD, guess who is now fabless and better off for it?

Do we really think AMD is better off ?

Anyway like I said Apple is a company that is slowly brining tech back into itself and is trying to depend less and less on others

 

[Shifty Geezer]

Anyway like I said Apple is a company that is slowly brining tech back into itself and is trying to depend less and less on others

Because they are effin' enormous and effin' enormously profitable! There's no room left for them to cut costs in the long term and be more profitable than by reducing how much they have to give up to other suppliers. If Nintendo or Sony or MS were as profitable as Apple and produced as profitable and popular hardware and needed to reduce costs, it'd also make some sense for them to try and diversify into hardware. However, they're not, and there's no way they can compete with established component manufacturers for a proprietary storage and distribution format!

 

[eastmen]

So apple is big enough but MS isn't ?

 

[MrFox]

Apple is fabless.

Or did I miss a big news?

There was a rumor they'd buy UMC (#8 above), but it didn't happen and their stuff is still made by Samsung.

 

[MrFox]

So apple is big enough but MS isn't ?

Uh... Yes, exactly.

How many Phones/Tablets does MS sell in a year? So little phones that they have a 7.6 billion loss, and called it quit. And that was just integration.

How many iPhones/iPad does Apple sell? Enough to justify a very large expenditure.

 

[eastmen]

Uh... Yes, exactly.

How many Phones/Tablets does MS sell in a year? So little phones that they have a 7.6 billion loss, and called it quit. And that was just integration.

How many iPhones/iPad does Apple sell? Enough to justify a very large expenditure.

you know MS still sells phones ? Their tablets also sell well.

 

[Shifty Geezer]

Their tablets also sell well.

Why are you making this comparison? Their tablets have made billions in losses, and have only had two (maybe three now) quarters of profitability. Apple has sold tens of millions of devices per year back maybe a decade with iPod, exploding into crazy numbers of units. How many Surfaces have been sold such that you say MS's tablets sell well in the same vein as Apple selling well?

When MS hits the sort of scales that Apple has, then they'll be at a point where investing billions in fabrication facilities makes sense.

 

[eastmen]

Why are you making this comparison? Their tablets have made billions in losses, and have only had two (maybe three now) quarters of profitability. Apple has sold tens of millions of devices per year back maybe a decade with iPod, exploding into crazy numbers of units. How many Surfaces have been sold such that you say MS's tablets sell well in the same vein as Apple selling well?

When MS hits the sort of scales that Apple has, then they'll be at a point where investing billions in fabrication facilities makes sense.

Well the surface RT line made billions of losses , the pro line has been profitable since the start.

Also if MS was to go with a nand based storage solution for their console games they would become one of the largest consumer of nand almost over night if not the largest.

 

[MrFox]

Which would drive the price way up.

Instantaneous supply/demand imbalance. It takes many years to build up production capacity. Do you remember what happened when apple suddenly needed a truckload of nand? Or when there were floods in thailand disrupting the supply of hdd? Or how hynix fires last year affected ram prices?

http://www.myce.com/news/ssd-prices-to-rise-due-nand-memory-shortage-71891/

Shortage means supply dropping, or demand rising, faster than the production capacity can be readjusted which takes years. Either way, the price goes up.

And when the production is overly optimistic, the price drops below operating costs... and Elpida goes bankrupt. The others lick their wounds and survive. If only there were no regulation to prevent them from fixing prices together, they'd be rich.

https://en.m.wikipedia.org/wiki/DRAM_price_fixing

 

[Shifty Geezer]

Why are you making this comparison? Their tablets have made billions in losses, and have only had two (maybe three now) quarters of profitability. Apple has sold tens of millions of devices per year back maybe a decade with iPod, exploding into crazy numbers of units. How many Surfaces have been sold such that you say MS's tablets sell well in the same vein as Apple selling well?

Seen numbers for the first time. 300k per month for the Surface Pro 3, so only 3.6 million per year.

 

[zed]

Seen numbers for the first time. 300k per month for the Surface Pro 3, so only 3.6 million per year.

to put that into comparison apple shipped 12.62 million ipads last quarter, the thing is ipads have been performing badly recently

 

[eastmen]

to put that into comparison apple shipped 12.62 million ipads last quarter, the thing is ipads have been performing badly recently

Yes but the surface pro 3 is a single device that targets the $800 to $2500 range of the market. You have ipads starting at $300 I belive (the mini) Only just recently did MS release the surface 3.

This is also a segment that 3 years ago MS had to have a massive write down on.

 

[Shifty Geezer]

The cost is immaterial when the discussion is how much a company should be willing to invest in creating their own NAND facility. At only a few million devices a year, there's no point to MS building a NAND facility in an attempt to reduce their costs. They'd never make back their money. Even Apple at their considerable volume of devices can see it as more economical to outsource production to highly developed fabricators than try to produce their own.

 

[MrFox]

Anyway, to use NAND as a distribution media, it would need to be 10 times lower cost. Even if they'd buy a memory manufacturer, they'd only save a few percent. They'd save basically the operating profit of the manufacturers they'd buy. (i.e. nothing)