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Doesn't seem to worry them too much: https://www.thestreet.com/investing/tsmc-posts-record-q2-profit-sees-robust-chip-demand-in-2020 https://www.thestreet.com/i

Doesn't seem to worry them too much: https://www.thestreet.com/investing/tsmc-posts-record-q2-profit-sees-robust-chip-demand-in-2020 https://www.thestreet.com/investing/tsmc-posts-record-q2-pro...

kurthr 6y ago
We do seem to be in a secular upswing in semiconductor demand, while TSMC remains the last foundry standing at the 7nm node. It seems like Samsung and Intel alternatives are bit too captive (internally competitive) for a large mobile phone producer. I don't think it's about actual 5G chips themselves, it's about ARM processors and mobile SoCs. It's doubtful to me that UMC and Global Foundries will catch up, but I do wonder at the long term effects. There are many billions of Yuan to spend on solving this problem. In the past they could get enough of the right people to move to China as they did with OLED.
- trevyn 6y ago
  But you see, money can’t buy love.
- mytailorisrich 6y ago
  > In the past they could get enough of the right people to move to China as they did with OLED. TSMC was founded by a "returnee" as well. Obviously he and his family were rather anti-communist (his father was a ROC official) so he fled from mainland China to Hongkong then the US during the Chinese Civil War. He built a career at TI then returned to China (Taiwan) and founded TSMC when the government was investing in the development of hitech industries. [1] There are quite a few similar examples on both sides (communists and nationalists). For example, and that's quite a twist of history, the 'father' of the PRC missile and space program was an MIT professor, Caltech professor, co-founder of JPL and was even involved in project Manhattan... Then he returned to mainland China in 1955 [2]. These days there are many more mainland Chinese in the West and Taiwan who work in the semiconductor industry and it's not uncommon for them to return to mainland China to take key positions. There is no doubt that they'll catch up. The only question is how fast. [1] https://en.wikipedia.org/wiki/Morris_Chang https://en.wikipedia.org/wiki/Morris_Chang [2] https://en.wikipedia.org/wiki/Qian_Xuesen https://en.wikipedia.org/wiki/Qian_Xuesen
  - knzhou 6y ago
    > Then he returned to mainland China in 1955. It's worth remembering that he did that because he was pushed out, during the Red Scare.
    - dragonelite 6y ago
      You already see the same happening under the Yellow peril banner.
    - DiogenesKynikos 6y ago
      Qian Xuesen was stripped of his security clearance in 1950, as a result of the Red Scare, meaning he couldn't work on his areas of expertise any more. He tried to leave the US, but was arrested on his way out and kept under house arrest for 5 years. That's the thanks he got for helping found the US rocketry program, so when he was released, he founded China's rocketry program.
- ttul 6y ago
  The next shoe to drop will be if ASML cuts off Chinese chipmakers. ASML absolutely dominates fab tech.
  - xxpor 6y ago
    Or the Dutch government bows to pressure from the US and makes the decision for them.
    - mytailorisrich 6y ago
      They already have. https://www.reuters.com/article/us-asml-holding-usa-china-insight/trump-administration-pressed-dutch-hard-to-cancel-china-chip-equipment-sale-sources-idUSKBN1Z50HN https://www.reuters.com/article/us-asml-holding-usa-china-in...
    - jacquesm 6y ago
      Or maybe they did it by themselves because they are capable of independent decision making. Just the other day someone here was loudly proclaiming we shouldn't be interested in US politics from overseas because it doesn't affect us. HN should make up its mind about this in a well reasoned way.
  - caycep 6y ago
    That's what I am wondering about. Is ASML the weak point? Would a US, Taiwan, or other company be able to develop and manufacture comparable lithography or EUV machines, or do they essentially have a chokehold on the market for now?
    - ttul 6y ago
      You can't fast-track the technology developed by ASML. We're talking about a company with 4,000 engineers (correct me if I'm wrong btw) who have been working on lithography magic for decades. EUV took decades of dedicated research to finally become a reality just in the past few years. They literally vaporize tin into a plasma in order to create the EUV light, which then has to pass through incredibly complex optics on its way to the mask. 97% of the light is lost on its way to the target... This thing consumes megawatts. It's literally magic.
ajross 6y ago
Yeah, exactly. TSMC has the premier process right now and is at capacity making chips for Apple, Qualcomm and other high margin (i.e. well-paying) customers. Cutting off the oddball folks for PR reasons costs them nothing at the moment.
- sudosysgen 6y ago
  Huawei is bigger than Apple. It's not exactly an oddball.
  - rgbrenner 6y ago
    By what measure? They have less than half the revenue, and only 9b in profits last year.
    - sudosysgen 6y ago
      Total phone sales, in number of units, which is what matters when figuring out how many chips to make, as well as market share as a proportion of units.
      - threeseed 6y ago
        You are also going to need to factor in upcoming Mac sales as well. And for all we know Apple may move to a multi-CPU strategy for its higher end products meaning you will get significantly more volume.
        sudosysgen 6y ago
        For all we know Huawei might do so too, plus HiSilicon makes their own modems while Apple buys them from Intel. Mac sales are essentially insignificant compared to phone sales, and nowhere near enough to make up the gap in units between Huawei and Apple.
  - ajross 6y ago
    Not as a TSMC fab customer it isn't, not remotely. The overwhelming bulk of Huawei's revenue remains in device manufacturing. They're a very recent entrant into the SoC market, and not moving a lot of product there.

Doesn't seem to worry them too much: https://www.thestreet.com/investing/tsmc-posts-record-q2-profit-sees-robust-chip-demand-in-2020 https://www.thestreet.com/investing/tsmc-posts-record-q2-pro...

kurthr 6y ago

We do seem to be in a secular upswing in semiconductor demand, while TSMC remains the last foundry standing at the 7nm node. It seems like Samsung and Intel alternatives are bit too captive (internally competitive) for a large mobile phone producer. I don't think it's about actual 5G chips themselves, it's about ARM processors and mobile SoCs. It's doubtful to me that UMC and Global Foundries will catch up, but I do wonder at the long term effects. There are many billions of Yuan to spend on solving this problem. In the past they could get enough of the right people to move to China as they did with OLED.

trevyn 6y ago
But you see, money can’t buy love.
mytailorisrich 6y ago
> In the past they could get enough of the right people to move to China as they did with OLED. TSMC was founded by a "returnee" as well. Obviously he and his family were rather anti-communist (his father was a ROC official) so he fled from mainland China to Hongkong then the US during the Chinese Civil War. He built a career at TI then returned to China (Taiwan) and founded TSMC when the government was investing in the development of hitech industries. [1] There are quite a few similar examples on both sides (communists and nationalists). For example, and that's quite a twist of history, the 'father' of the PRC missile and space program was an MIT professor, Caltech professor, co-founder of JPL and was even involved in project Manhattan... Then he returned to mainland China in 1955 [2]. These days there are many more mainland Chinese in the West and Taiwan who work in the semiconductor industry and it's not uncommon for them to return to mainland China to take key positions. There is no doubt that they'll catch up. The only question is how fast. [1] https://en.wikipedia.org/wiki/Morris_Chang https://en.wikipedia.org/wiki/Morris_Chang [2] https://en.wikipedia.org/wiki/Qian_Xuesen https://en.wikipedia.org/wiki/Qian_Xuesen
- knzhou 6y ago
  > Then he returned to mainland China in 1955. It's worth remembering that he did that because he was pushed out, during the Red Scare.
  - dragonelite 6y ago
    You already see the same happening under the Yellow peril banner.
  - DiogenesKynikos 6y ago
    Qian Xuesen was stripped of his security clearance in 1950, as a result of the Red Scare, meaning he couldn't work on his areas of expertise any more. He tried to leave the US, but was arrested on his way out and kept under house arrest for 5 years. That's the thanks he got for helping found the US rocketry program, so when he was released, he founded China's rocketry program.
ttul 6y ago
The next shoe to drop will be if ASML cuts off Chinese chipmakers. ASML absolutely dominates fab tech.
- xxpor 6y ago
  Or the Dutch government bows to pressure from the US and makes the decision for them.
  - mytailorisrich 6y ago
    They already have. https://www.reuters.com/article/us-asml-holding-usa-china-insight/trump-administration-pressed-dutch-hard-to-cancel-china-chip-equipment-sale-sources-idUSKBN1Z50HN https://www.reuters.com/article/us-asml-holding-usa-china-in...
  - jacquesm 6y ago
    Or maybe they did it by themselves because they are capable of independent decision making. Just the other day someone here was loudly proclaiming we shouldn't be interested in US politics from overseas because it doesn't affect us. HN should make up its mind about this in a well reasoned way.
- caycep 6y ago
  That's what I am wondering about. Is ASML the weak point? Would a US, Taiwan, or other company be able to develop and manufacture comparable lithography or EUV machines, or do they essentially have a chokehold on the market for now?
  - ttul 6y ago
    You can't fast-track the technology developed by ASML. We're talking about a company with 4,000 engineers (correct me if I'm wrong btw) who have been working on lithography magic for decades. EUV took decades of dedicated research to finally become a reality just in the past few years. They literally vaporize tin into a plasma in order to create the EUV light, which then has to pass through incredibly complex optics on its way to the mask. 97% of the light is lost on its way to the target... This thing consumes megawatts. It's literally magic.

ajross 6y ago

Yeah, exactly. TSMC has the premier process right now and is at capacity making chips for Apple, Qualcomm and other high margin (i.e. well-paying) customers. Cutting off the oddball folks for PR reasons costs them nothing at the moment.

sudosysgen 6y ago
Huawei is bigger than Apple. It's not exactly an oddball.
- rgbrenner 6y ago
  By what measure? They have less than half the revenue, and only 9b in profits last year.
  - sudosysgen 6y ago
    Total phone sales, in number of units, which is what matters when figuring out how many chips to make, as well as market share as a proportion of units.
    - threeseed 6y ago
      You are also going to need to factor in upcoming Mac sales as well. And for all we know Apple may move to a multi-CPU strategy for its higher end products meaning you will get significantly more volume.
      - sudosysgen 6y ago
        For all we know Huawei might do so too, plus HiSilicon makes their own modems while Apple buys them from Intel. Mac sales are essentially insignificant compared to phone sales, and nowhere near enough to make up the gap in units between Huawei and Apple.
- ajross 6y ago
  Not as a TSMC fab customer it isn't, not remotely. The overwhelming bulk of Huawei's revenue remains in device manufacturing. They're a very recent entrant into the SoC market, and not moving a lot of product there.