TechMivec :
I feel as though many employees and managers at these production facilities just take off for vacation or whatever towards the end of the year and no one else is there to make up for it.
The biggest holiday in Asia is the Lunar (Chinese) New Year, usually in late January or early February. Christmas/New Year's is more a Western holiday. If you're American, the Lunar New Year in Asian cultures is like Christmas, New Year's, and Thanksgiving all rolled together into one. It's not unheard of for people to spend over 24 hours in a continuous traffic jam to drive to their hometown for the holiday.
kletkeman :
Hmmm ... prices conveniently rising as the holiday season approaches when demand is at its peak. Absolutely nothing suspicious about that 🙂
The NAND and RAM markets are extremely competitive, which means the profit margins are very slim. Unfortunately they have to plan production volumes a few months in advance, so they're all guessing how much demand there will actually be. They tend to err on the safe side because if they make too much, due to the slim margins they'll frequently end up having to sell what they make at a loss.
Most of the RAM and SSD prices you may remember as being "low" over the years, you were actually buying it for less than production cost. The manufacturers overproduced, resulting in a glut. That depressed prices resulting in them having to sell the products at a loss in order to recoup as much as they could of their initial investment. (There is no law that says people have to buy your product for more than it cost you to make it.) If you don't understand why a company would willingly sell products at a loss, I suggest you read up on the wikipedia entry on sunk costs. One of my previous mangers didn't understand sunk costs, and refused to cut the price of our 80286 laptops to below their production cost. As a result, our company got stuck with millions of dollars of inventory in unsold 286 laptops, when 386 processors were being phased out in favor of the 486, making it practically impossible to even give away the 286 laptops.
https://en.wikipedia.org/wiki/Sunk_costs
This year you had a trifecta of factors causing manufacturers to play it safe. The global economy was still in the throes of recession but struggling to climb out, so nobody was really sure if it would improve by the end of the year. Uncertainty about who was going to win the U.S. election and thus determine future U.S. trade policy. And Intel/Micron making a lot of noise about 3D XPoint entering the market in late 2016 and how it was going to obliterate flash-based SSDs in performance. All these resulted in manufacturers doing the safe thing and limiting production.
The economy is now doing better (at least in the U.S.) than most economists predicted 3-6 months ago. Although a Trump victory was widely seen as depressing global trade, now that he's actually won the market seems to have decided it doesn't really matter. And so far I haven't heard a peep out of Intel and Micron about 3D XPoint. This has resulted in stronger holiday sales than expected, and thus a shortage in NAND supply. On top of that, the transition to smaller NAND dies has proven rockier and slower than expected, crimping supply even more.
There's no grand conspiracy here. Simple supply and demand. As the article states, Tom's Hardware predicted this possibility even as far back as May.
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