5 ms·

EUV is hard and expensive. You need massive clean rooms and a huge laser. Afterwards you need to scale up and actually become profitable, which is even harder.

by whazor 6y ago

EUV is hard and expensive. You need massive clean rooms and a huge laser. Afterwards you need to scale up and actually become profitable, which is even harder. One EUV machine costs 145 million dollars, and you are not going to buy a second one before the first one works well enough. That is why TSMC has now half of all the machines. Many manufacturers gave up making fabs and went to TSMC for production. I do think the proximity of Taiwan to China is a huge help for both fast turnaround of tools/machines as in workers. China themselves are banned from having the latest chip technology. Taiwan is often used as a proxy for western countries to be near China.

brundolf 6y ago
$145 million dollars is pocket change to Big Tech. It must just be that they don't think it would be profitable enough to compete when they can buy. If they ever stopped being able to buy, I'm sure they'd get to work real quick. I could also see Apple in-housing their chip fab at some point sooner, just for the sake of continued vertical integration. It doesn't hurt that they have the deepest pockets too. The interesting question is whether or not they'd ever take orders from third parties.
- topspin 6y ago
  > $145 million dollars is pocket change to Big Tech. That's the Taiwan price. What's the domestic multiplier on that price? What is the time to market price to pay if you're trying to pull this off far from the competitive suppliers and experienced tool makers in Asia? Andy Grove explained all of this 10 years ago[1]. Today we see Intel toying with farming out high end fab work; another milestone in the decline of US technology that Andy wrote about. [1] https://www.bloomberg.com/news/articles/2010-07-01/andy-grove-how-america-can-create-jobs https://www.bloomberg.com/news/articles/2010-07-01/andy-grov...
  - raverbashing 6y ago
    This article is priceless. Thanks for linking it. > But what kind of a society are we going to have if it consists of highly paid people doing high-value-added work—and masses of unemployed?
- baybal2 6y ago
  > $145 million dollars is pocket change to Big Tech. It must just be that they don't think it would be profitable enough to compete when they can buy. If they ever stopped being able to buy, I'm sure they'd get to work real quick. Even if they have money, I doubt they have the capability. They may have billions USD for pocket change, but they can't make a freaking working video call app, and a web browser which eats less than 1GB of memory just to draw a few pictures, and a text layout.
- rdsubhas 6y ago
  145mm is only the machine cost. Then there is people, raw materials, IP, design, technology, software, maintenance, repair, upgrade, integrating, licensing, power, much more. I'm guessing the split here is 20/80. 145mm is the machine cost, and then it takes 800mm or more over the lifetime. That's a billion dollars right there. A billion dollars revenue is unicorn level. But here we're talking just about putting aside a billion in operational expense just for the chip. Then there is the cost of building the actual product on top of this. Then there is the useful life of the machine. No product wants to be on the same chip for 5 years. So they have to recoup the 1 billion fast. The only way would be to generate extra revenue out of the machine by sharing it with other companies. Ah but now you have to cater to their demands as well. Better have a profitable model around this. But well, that's what TSMC is...
  - jacques_chester 6y ago
    As of their most recent balance sheet, Apple holds $90Bn in cash and cash-equivalent assets, plus another $100Bn in marketable securities. They could probably raise another several tens of billions of dollars with bond market issues if they wanted. If Apple goes into manufacturing their own semiconductors, they could absolutely bootstrap the whole shebang and have tens of billions of dollars left over.
  - fomine3 6y ago
    > No product wants to be on the same chip for 5 years. There are many chips stick to old process except latest performance chips like smartphone SoC, GPU, TPU.
- trianglem 6y ago
  Feels like exceptionally short term thinking especially given Taiwan’s proximity to China and precedent around China flexing its muscles around expanding its borders with Hong Kong, South China seas, border with India etc.

by whazor 6y ago

brundolf 6y ago

$145 million dollars is pocket change to Big Tech. It must just be that they don't think it would be profitable enough to compete when they can buy. If they ever stopped being able to buy, I'm sure they'd get to work real quick. I could also see Apple in-housing their chip fab at some point sooner, just for the sake of continued vertical integration. It doesn't hurt that they have the deepest pockets too. The interesting question is whether or not they'd ever take orders from third parties.

topspin 6y ago
> $145 million dollars is pocket change to Big Tech. That's the Taiwan price. What's the domestic multiplier on that price? What is the time to market price to pay if you're trying to pull this off far from the competitive suppliers and experienced tool makers in Asia? Andy Grove explained all of this 10 years ago[1]. Today we see Intel toying with farming out high end fab work; another milestone in the decline of US technology that Andy wrote about. [1] https://www.bloomberg.com/news/articles/2010-07-01/andy-grove-how-america-can-create-jobs https://www.bloomberg.com/news/articles/2010-07-01/andy-grov...
- raverbashing 6y ago
  This article is priceless. Thanks for linking it. > But what kind of a society are we going to have if it consists of highly paid people doing high-value-added work—and masses of unemployed?
baybal2 6y ago
> $145 million dollars is pocket change to Big Tech. It must just be that they don't think it would be profitable enough to compete when they can buy. If they ever stopped being able to buy, I'm sure they'd get to work real quick. Even if they have money, I doubt they have the capability. They may have billions USD for pocket change, but they can't make a freaking working video call app, and a web browser which eats less than 1GB of memory just to draw a few pictures, and a text layout.
rdsubhas 6y ago
145mm is only the machine cost. Then there is people, raw materials, IP, design, technology, software, maintenance, repair, upgrade, integrating, licensing, power, much more. I'm guessing the split here is 20/80. 145mm is the machine cost, and then it takes 800mm or more over the lifetime. That's a billion dollars right there. A billion dollars revenue is unicorn level. But here we're talking just about putting aside a billion in operational expense just for the chip. Then there is the cost of building the actual product on top of this. Then there is the useful life of the machine. No product wants to be on the same chip for 5 years. So they have to recoup the 1 billion fast. The only way would be to generate extra revenue out of the machine by sharing it with other companies. Ah but now you have to cater to their demands as well. Better have a profitable model around this. But well, that's what TSMC is...
- jacques_chester 6y ago
  As of their most recent balance sheet, Apple holds $90Bn in cash and cash-equivalent assets, plus another $100Bn in marketable securities. They could probably raise another several tens of billions of dollars with bond market issues if they wanted. If Apple goes into manufacturing their own semiconductors, they could absolutely bootstrap the whole shebang and have tens of billions of dollars left over.
- fomine3 6y ago
  > No product wants to be on the same chip for 5 years. There are many chips stick to old process except latest performance chips like smartphone SoC, GPU, TPU.
trianglem 6y ago
Feels like exceptionally short term thinking especially given Taiwan’s proximity to China and precedent around China flexing its muscles around expanding its borders with Hong Kong, South China seas, border with India etc.