Comment by spockz
10 hours ago
The only reason I can see Apple do this is if it enables them to sell entry level devices with vastly more ram than the competition can afford. Say entry level MacBook Pro with 256GiB ram to facilitate running frontier level local models. If that is an edge they want to have.
In what world would 256GB of RAM be “entry level”?
In the same world 8GB used to be unfathomably huge not that long ago?
Hell, an 8GB hard drive was unfathomable when I was a kid in the 90s. I remember getting a 30 megabyte drive for our Mac LC.
The first computer I ever used had 512K, which was a great deal back then, and by the time I was old enough to learn to type it had 10MB disk too.
My childhood best friend and neighbour had the same kind of computer except they only had something like 384K of memory and I tried to convince them their computer was broken when it didn't count up all the way.
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And that Mac LC only had a max of 10MB of ram.
The same world where a MacBook Pro G4 12" came base level with 256MB of RAM.
The same world where a classic Mac came with 128KB of RAM.
We might someday live in a world where entry-level is 256TB of RAM.
That is the timeline I want to live in. Probably.
A world where Apple has invested in their own fabs, so they can sell devices with drastically more RAM than their competition at entry-level prices.
The point of my GP post was that due to being one of the world's biggest and longest-term buyers, Apple is already paying very close to actual manufacturing costs + amortized capex because RAM is an undifferentiated commodity. Owning the factory themselves doesn't reduce the actual manufacturing cost + amortized capex that Apple would have to pay their own factory. Apple is already buying RAM at the lowest possible margins. It's similar math to deciding whether to spend your own cash or get a loan. If the loan's interest rate is low enough, it's better take the loan and put your cash to work where it can return a higher margin. And at the incredibly low margins Apple pays for RAM, keeping that cash in long-term investments will actually earn more money than putting it into building RAM factories.
If Apple could go back in time 3.5 years and decide to build their own factory, that would put them in a great position today. But deciding to do it now won't increase their supply 3.5 years from now more than just increasing their long-term orders with existing suppliers. Those suppliers will start building new factories based on Apple's increased orders and they'll do it faster and cheaper than Apple can because they don't have to build some factories in the U.S. for political reasons or worry as much about environmental regulation, permitting and ensuring Apple employees in Penang get benefits similar to employees in Cupertino.
I'm no business expert and Apple is of course in a unique position, but owning your own fabs has rarely worked out long term. They require eye watering amounts of CAPEX that needs to be amortized over a timeframe that's longer than apple's products. Today's bleeding edge fabs become tomorrow's "cheap" fabs that pump out chips that don't need to be bleeding edge for the components that go into everyday products like microwaves, cars, etc.
One of the reasons Intel fell behind is that they couldn't give access to their competitors for business reasons, and therefore could never scale as high as TSMC could.
There are many other reasons, but accounting is a huge one. Unless there is a huge ROI or something else we don't otherwise know, I don't see Apple adding such expensive deprecating assets onto their books as chip fabs.
Why would they sell a device with 256GB of RAM as the lowest-spec device rather than making 8 32GB or 16 16GB machines as their entry-level?
Apple’s not exactly famous for their low pricing on spec upgrades nor competing based on being the price leader…
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