3 ms·
>most chip production doesn't occur at cutting edge nodes Of course, but the margins are much better on cutting-edge nodes. Being second-to-market on a node do
by jdietrich 7y ago
>most chip production doesn't occur at cutting edge nodes
Of course, but the margins are much better on cutting-edge nodes. Being second-to-market on a node doesn't save you much on capital costs, but you have to compete harder on wafer pricing. TSMC have about 5x the revenues of GF and the gap is widening.
- baybal2 7y ago> Of course, but the margins are much better on cutting-edge nodes. No, not anymore for at least a decade, and this is the very reason GloFo bailed out on the "Arms Race." Extreme capex with uncertain payback times looked very scary to their investors. TSMC 7FF will only break even next year.
- kingosticks 7y ago>TSMC 7FF will only break even next year. I've no idea if that's true but assuming it is, then from next year it's pure profit and they are the big fish in a pond of 2 (or 3?) fish with no new fish in sight. People will be using this process for years and years to come. With so little competition at 7nm and the high barriers to entry (even over time) they can surely maintain their margins for much longer than at previous nodes. I'm not saying bailing wasn't the right decision for Global Foundries and the risk might be higher now, but so the rewards.