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Why do we think capacity is not a complete commodity? Is it because of the high setup costs or just the fact that its perpetually in short supply? Or maybe I j
by newswasboring 6y ago
Why do we think capacity is not a complete commodity? Is it because of the high setup costs or just the fact that its perpetually in short supply?
Or maybe I just don't know the jargon complete commodity.
- londons_explore 6y agoI believe OP means that certain types of IC's (for example memory chips) require pretty different technology and equipment than other chips (eg. processors). That means the production capacity isn't fungible.
- s0rce 6y agoIsn't that true of most things, one can't farm pigs with an oil rig, those facilities really only make one thing. Certain facilities could be retooled/repurposed and this is maybe a bit easier in agriculture for certain things (plant soy vs corn) but you can't just plant an almond orchard overnight.
- newswasboring 6y agoYeah but I think that is the point. In their view the commoditization of something means how easy is it to retool to make something similar. Fabs can be retooled, after all its usually all the same machinery, but the process knowledge is a huge barrier.