It almost certainly is. Once people get used to the higher prices, and the companies see that the units sell anyway, there is no meaningful incentive to lower costs again.
This has played out time and time again during every other supply-side shock. Once prices go up, they don't come back down.
That's not true. We've seen prices from supply shock go back down (the increase in hard drive prices when there were floods in Asia 10-15 years ago comes to mind as an example). It does take a while, but it will happen eventually.
Even then, prices stayed elevated for years. They never went back to pre-supply shock prices. Right around that time too the industry consolidated. WD bought Hitachi, Seagate bought Samsung's HDD business. It left a duopoly, so now there was no competitive pressure for a price war. Prices got locked in higher than pre-flood levels, intentionally.
For the current DRAM situation, I can almost promise we'll never see $60-$90 RAM again. Maybe, 32GB won't cost you $500 eventually, but it'll cost you $250-$350 instead of $500. If the market can bear it, why would anyone get into a price war that's just a race to the bottom where no one wins?
For the eggs I buy, they are currently $7.99/dozen. Cheapest in my store is $5.99/dozen.
That doesn't disprove my point though. Prices are still higher as a baseline than before the supply side shock. Prices raise to a "new normal" and consumers adapt, removing pressure to lower back down to pre-shock levels.
wholesale egg prices have actually plummeted, yet retail prices have only drifted slowly downward incrementally, and have not reached the previous baseline. Its asymmetric price transmission, and its a documented economic phenomenon. "Prices go up like rockets, and fall like feathers"
Eggs in USA literally hit a ten year low a few months ago. I don't know where you live, probably SF or something, but a dozen eggs here is under 3 dollars.
PC components market has historically been highly competitive so I’m pretty sure it wouldn’t quite work out for vendors who tried doing that (aside from GPUs/Nvidia)
It's also because television producers found alternative revenue streams that allow them to sell the TVs for less while still making more. If you look for a TV without all of the adware/bloatware/spyware you can see the true cost of a TV in 2026.
You have evidence that they are going to go down? Not unless government policy steps in to pressure chip makers, or establish new markets. Corporations will use inflation, ai, et al to validate their record profits at the cost of the consumer. Monopolies or better put the mergers of companies over the last 40 years hasn’t lead to cheaper prices, it never was going to either.
Can you point to an example of this happening in the past? Where a supply shortage leads to price increases and "record profits", and the price never goes back down?
Good point. But only a few companies create these things. They can jack up the price and there is nothing we can do. Is there a mom and pop shop making memory yet? Nope, centralized power of commerce is a threat.
I think the point is that "only a few companies create these things" has always been true.
You need to provide a compelling argument why it is different this time.
The counter-argument is pretty basic:
RAM companies are currently selling as much as they can at high prices. This leads to investment in building new factories.
At some point the supply of new RAM will match the demand for it. When that occurs companies can increase profit by cutting prices to gain market share.
What's more, all the RAM companies have slightly different estimates of what the demand is. This leads to different levels of investment in new factories. Some will over-invest in new factories and the only way they can make their investment back is by increasing market share.
The final factor is new entries in the market. Chinese RAM manufactures can already produce DDR4 RAM (but only small amounts of DDR5). They can both increase supply of DDR4 RAM and are aggressively chasing DDR5 capabilities.
TL;DR: The profit motive is too strong for companies to artificially keep prices high once demand drops.
There's a lot of money behind AI to try to make fetch happen but every attempt to capture the real cost of running these models has driven home to people that we're still deep in the "burn money to acquire customers" phase before the "start charging people gobs of money to make a profit" turn. All the stories of companies burning through their whole year of AI budget in the recent move from subscription to usage based billing is a big example.
If that bubble pops like it seems to be threatening to do memory prices could drop back to their old levels give or take some sticky inflation.
Suppose you have a warehouse full of widgets. You bought them them for $450 each, and sell them for $500. You're really happy with this profit, and you can just keep selling them at $500...forever, right?
But then, I get my own warehouse and fill it with widgets that I bought at $400 each because I entered under better market conditions. And I really want to sell these widgets -- they aren't making me any money when they just sit there taking up space and burning rent.
So I price these widgets at $475, to attract customers. It works; the widgets are flying off the shelves. And they're being purchased by people who used to be your customers, and I'm making even more money per-unit than you are.
What's your next move? Do you want to keep losing customers to me, or do you want to adjust your price to be more competitive?
Price wars are a race to the bottom that everyone loses. In reality, such oligopolies follow a kinked demand curve.
A new entrant isn't guaranteed to now price at $475. They'll see the incumbent being successful at $500. Now they price at $499 rather than trigger a destructive price war. Companies collude on this quite frequently. When everyone keeps their prices high, all get to enjoy the big margins.
Outside of that, ok so you have a warehouse full of widgets you need to move fast. So you undercut, and sell out. If demand is still bigger than your supply, you're now out of capacity, customers are going back to buying for $500 from your competitor. That means you've mispriced your limited inventory, so now you raise your prices up to closer to $500 because it helps you control your capacity, and also you know the market can clearly bear it.
Anyway, those are obviously overly simplified scenarios prices rarely fall down dramatically because of tacit collusion. Its asymmetric price transmission ("Prices go up like rockets, but fall like feathers")
Some lose more, i.e. PRC manufacturers well incentivized to involute to drive competitors out of business. $500 for 10% marketshare is less than 100$ for 60%. Of course PRC being spoiler, at least under current geopolitics where they have less reason to align with existing memory cartel.
I don’t have data for how much tvs are currently subsidized. But you can just look at the inflation adjusted price of TVs from say 1980 to 2010 and see the drop without worrying about adjusting for advertising and spyware subsidies.
You can also look at computer monitors (which don’t have advertising and spyware) and see an enormous price drop.
People keep claiming this but it isn't true. The subsidy from advertising is very low:
> They make about $20 per user annually and, assuming an active TV service life of five years, yield about $100 over the lifecycle of a main viewing room TV.
