> In the UK, the marginal unit is almost always a gas-fired power plant. As a result, one widely cited academic analysis found that gas set the price of power 97% of the time in the UK in 2021.
It might be very effective marketing. The big non-Chinese OEMs trust and use Korean and Japanese DRAM, and they might have been unwilling to put DRAM from CXMT into their products. (CXMT is newish, does not have access to ASML gear, which ASML would like you to believe makes it harder to make high-quality DRAM, DRAM is historically not a very large fraction of the cost of most non-huge-memory machines, and a bad DIMM is an expensive mistake for a company like Dell or HPE that is on the hook for repairs.)
But now CXMT seems to have gotten at least Dell, HP (I wonder if the article meant HPE), Acer and Asus to buy and attempt to qualify samples. If CXMT lands some serious purchasing agreements while still selling well above cost, that’s a win for them.
Because market rate is a 400%+ markup right now and not everyone is a greedy American kleptocrat with a diagnosable addiction to extracting every possible cent of wealth on the planet within a single fiscal quarter.
I can see a few other benefits to the "Sell at a reasonable markup, rather than 'market price'" strategy.
* You get a reputation for not price-gouging.
* Your company gets used to operating with "enough" cash, rather than having "crazy" amounts of cash that it might be tempted to spend on misadventures.
* When the collapse of LLM Mania burns the LLM industry and its hangers-on to the ground, you get to keep your prices the same and keep your business practices the same... rather than scrambling to figure out how to make do with far less cash.
Does the last part of your comment explain it? They need revenue to expand capacity and the market has opened up a window to become a bigger supplier while still being profitable.
75% margin means they have around $79.2bn of potential revenue sitting in inventory. Next quarter revenue is projected to be $65bn, so 110 days of stock.
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