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GloFo is sinking because TSMC aggressively courted AMD. In an alternate universe where TSMC was content to sit back and extract margin, GloFo would still be in
by jjoonathan 6y ago
GloFo is sinking because TSMC aggressively courted AMD. In an alternate universe where TSMC was content to sit back and extract margin, GloFo would still be in the running.
Even if TSMC decided tomorrow to sit back and extract margin, GloFo could still probably get back in the game. That ability decays with time, of course, and that decay is what TSMC buys with their low margins. They are suffocating their competition to build a moat. It's a much better strategy than "extract margin and make big bets on fancy new tech to stay one node ahead," with Intel as Exhibit A.
- dralley 6y agoGloFo has historically been unprofitable and their investors were unhappy with the idea that, just as they had finally reached profitability, they now needed to either A) spend tens of billions of dollars on a new fab facility B) shut down production in one of the existing facilities while spending billions of dollars to upgrade it to 7nm While not having the volume to be able to court the largest customers who are the most interested in 7nm. They decided to stick with their existing 14nm infrastructure and specialize in the long tail of smaller customers who want custom chips and don't need a leading-edge node.