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companies headquartered in Santa Clara Valley that care about fabs: Intel, AMD, Nvidia, Lam Research, Applied Materials, KLA, GlobalFoundries, Broadcom, Apple,

by rrss 6y ago

companies headquartered in Santa Clara Valley that care about fabs: Intel, AMD, Nvidia, Lam Research, Applied Materials, KLA, GlobalFoundries, Broadcom, Apple, Xilinx, Maxim Integrated (now part of Analog Devices), Linear Technology (now part of Analog Devices), Marvell, Cisco, Cypress, Google, Cadence, Synopsys, Western Digital, Seagate.

ssivark 6y ago
Yes, but compare their combined market capitalization (of course, excepting Apple/Google) to any one or two of FAAMNG :-)
- rrss 6y ago
  If a substantial fraction of the semiconductor industry (IDM + fabless + fab suppliers) is in Silicon Valley, then the name still makes sense even if there is a lot of other money floating around the area. also, why would this make sense: > of course, excepting Apple Apple is probably the single largest customer of TSMC, and their products depend on their semiconductor design team (especially true now that they are moving to in-house CPUs for laptop/desktop). Why throw them out from a discussion of companies that care about fabs?
  - ssivark 6y ago
    If one asked the question of which location in the US the semiconductor industry has the highest footprint in, the answer would definitely be the Bay Area (maybe California, to include San Diego, etc). But if you ask the question of which sectors the Bay Area has the largest investment and footprint in, then semiconductors would (unfortunately) be only a small part of that. That uncomfortable truth (which is exactly what I'm trying to point out in the above comment) is that market valuations today seem to be driven by the things built on top (in particular, the "data economy" and the effectiveness of personalization-driven consumption increases), rather than (for eg.) the semiconductor engg which is crucial to build those platforms. An analogue of this is when the Ford CEO speculated in 2018 to the effect that it might be more profitable to sell customer data derived by selling cars, than from selling cars in the first place.
- emteycz 6y ago
  TSMC would be third and then there would be a gap again...
caycep 6y ago
I have to wonder - how much of the fabs going to Taiwan, Shanghai, SK are due to 1) government support - i.e. the national government saying "we want this sector to succeed" and providing funding via grants/loans/subsidies, (or by fiat w/r to PRC) 2) actual labor costs? 3) talent, i.e. American-trained Chinese/Taiwan/Korean talent coming home, then generation 2.0 starting up research at Chineses/Taiwan/korean universities? Assuming a long-term visionary US government wanted to compete; would we have to fund fab research, development, and capital i.e. similar to the pentagon funding Newport News shipyard to keep strategic know-how alive in the US market?
- nostrademons 6y ago
  Probably all of the above. The founder of TSMC was educated at Harvard/MIT/Stanford, and spent the first 25 years of his career working for Texas Instruments in Silicon Valley. He founded TSMC because the Taiwanese government gave him a large grant to found a nonprofit research institute in Taiwan. He was looking at the competitive landscape and realized that the one way Taiwan could capitalize on its biggest advantage (low labor costs of fairly educated labor, at the time) was to do only manufacturing and outsource the design, IP, and marketing to other countries that were better at it.
- tooltalk 6y ago
  1) gov't support: TSMC's had plenty of gov't support from the getgo and my understanding is that the govt still has some financial stake in TSMC -- which would be a red flag in the US. Samsung has a big $15B fab in Austin, TX aka, FTZ foreign-trade zone, where Apple's A chips were made until the early 2010's, but after Apple moved to TSMC in Taiwan in 2012-13, it stopped investing in smaller nodes -- now, it's mainly producing memory products (and Tesla's FSD chips). All their latest nodes (< 14nm) are in South Korea. 2) labor cost: probably very insignificant. While they employ high-paying high-tech workers, it's a capital-intensive, not labor-intensive, business. Both TSMC and Samsung spend over $10+B annually on CAPEX. 3) brain drain?: Morris Chang worked for TI for decades before founding TSMC. He pretty much started the outsourcing business in the late 80 single-handedly. Sure. I don't agree with Trump on a lot of things, but he's at least doing something to bring them back.

by rrss 6y ago

ssivark 6y ago

Yes, but compare their combined market capitalization (of course, excepting Apple/Google) to any one or two of FAAMNG :-)

rrss 6y ago
If a substantial fraction of the semiconductor industry (IDM + fabless + fab suppliers) is in Silicon Valley, then the name still makes sense even if there is a lot of other money floating around the area. also, why would this make sense: > of course, excepting Apple Apple is probably the single largest customer of TSMC, and their products depend on their semiconductor design team (especially true now that they are moving to in-house CPUs for laptop/desktop). Why throw them out from a discussion of companies that care about fabs?
- ssivark 6y ago
  If one asked the question of which location in the US the semiconductor industry has the highest footprint in, the answer would definitely be the Bay Area (maybe California, to include San Diego, etc). But if you ask the question of which sectors the Bay Area has the largest investment and footprint in, then semiconductors would (unfortunately) be only a small part of that. That uncomfortable truth (which is exactly what I'm trying to point out in the above comment) is that market valuations today seem to be driven by the things built on top (in particular, the "data economy" and the effectiveness of personalization-driven consumption increases), rather than (for eg.) the semiconductor engg which is crucial to build those platforms. An analogue of this is when the Ford CEO speculated in 2018 to the effect that it might be more profitable to sell customer data derived by selling cars, than from selling cars in the first place.
emteycz 6y ago
TSMC would be third and then there would be a gap again...

caycep 6y ago

I have to wonder - how much of the fabs going to Taiwan, Shanghai, SK are due to 1) government support - i.e. the national government saying "we want this sector to succeed" and providing funding via grants/loans/subsidies, (or by fiat w/r to PRC) 2) actual labor costs? 3) talent, i.e. American-trained Chinese/Taiwan/Korean talent coming home, then generation 2.0 starting up research at Chineses/Taiwan/korean universities? Assuming a long-term visionary US government wanted to compete; would we have to fund fab research, development, and capital i.e. similar to the pentagon funding Newport News shipyard to keep strategic know-how alive in the US market?

nostrademons 6y ago
Probably all of the above. The founder of TSMC was educated at Harvard/MIT/Stanford, and spent the first 25 years of his career working for Texas Instruments in Silicon Valley. He founded TSMC because the Taiwanese government gave him a large grant to found a nonprofit research institute in Taiwan. He was looking at the competitive landscape and realized that the one way Taiwan could capitalize on its biggest advantage (low labor costs of fairly educated labor, at the time) was to do only manufacturing and outsource the design, IP, and marketing to other countries that were better at it.
tooltalk 6y ago
1) gov't support: TSMC's had plenty of gov't support from the getgo and my understanding is that the govt still has some financial stake in TSMC -- which would be a red flag in the US. Samsung has a big $15B fab in Austin, TX aka, FTZ foreign-trade zone, where Apple's A chips were made until the early 2010's, but after Apple moved to TSMC in Taiwan in 2012-13, it stopped investing in smaller nodes -- now, it's mainly producing memory products (and Tesla's FSD chips). All their latest nodes (< 14nm) are in South Korea. 2) labor cost: probably very insignificant. While they employ high-paying high-tech workers, it's a capital-intensive, not labor-intensive, business. Both TSMC and Samsung spend over $10+B annually on CAPEX. 3) brain drain?: Morris Chang worked for TI for decades before founding TSMC. He pretty much started the outsourcing business in the late 80 single-handedly. Sure. I don't agree with Trump on a lot of things, but he's at least doing something to bring them back.