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"The iPhone maker said last month it will lose $3 billion to $4 billion in sales in the current quarter ending in June because of the chip shortage," The IPhon

"The iPhone maker said last month it will lose $3 billion to $4 billion in sales in the current quarter ending in June because of the chip shortage," The IPhone maker has $3 to $4 billion in incentives to fund its own factory

justaguy88 5y ago
This is a great point, Apple has plenty of capital to fund it's own dedicated fabs (even if operated by TSMC)
lostlogin 5y ago
I wonder if it’s as simple as that? Presumably making their own fab would mean they had more chips, but then the chips need to get to their production line. Shipping is a significant problem at the moment.
thamer 5y ago
I was curious about the cost and looked it up, the estimates I found were in the $5-15 billion range. Not that it's out of reach or anything, but it's quite a bit more than $3-4B. For example, this TSMC fab planned in Arizona is estimated to cost $12 billion: https://www.forbes.com/sites/willyshih/2020/05/15/tsmcs-announcement-of-a-us-fab-is-big-news/ https://www.forbes.com/sites/willyshih/2020/05/15/tsmcs-anno...
- flatiron 5y ago
  But you don’t build factories to fund quarterly profits. It should be normal risk mitigation if you are dealing at that scale to have a plan B. Even if it’s your own plant.
Mountain_Skies 5y ago
True but that also creates vertical integration, which is something that has caused many problems in the past. I'd like to see these huge companies solve their supply chain problems by splitting themselves up, in the process creating the companies they need to supply them, without owning them outright or restricting them from working with others in the market. Basically spin-offs that are designed to be spin-offs from the start. Since the current stockholders would have shares in existing company and the new entities, they're not being damaged in the process so they shouldn't be opposed unless maximizing vertical integration is their plan for continued wealth growth.

justaguy88 5y ago

This is a great point, Apple has plenty of capital to fund it's own dedicated fabs (even if operated by TSMC)

lostlogin 5y ago

I wonder if it’s as simple as that? Presumably making their own fab would mean they had more chips, but then the chips need to get to their production line. Shipping is a significant problem at the moment.

thamer 5y ago

I was curious about the cost and looked it up, the estimates I found were in the $5-15 billion range. Not that it's out of reach or anything, but it's quite a bit more than $3-4B. For example, this TSMC fab planned in Arizona is estimated to cost $12 billion: https://www.forbes.com/sites/willyshih/2020/05/15/tsmcs-announcement-of-a-us-fab-is-big-news/ https://www.forbes.com/sites/willyshih/2020/05/15/tsmcs-anno...

flatiron 5y ago
But you don’t build factories to fund quarterly profits. It should be normal risk mitigation if you are dealing at that scale to have a plan B. Even if it’s your own plant.

Mountain_Skies 5y ago

True but that also creates vertical integration, which is something that has caused many problems in the past. I'd like to see these huge companies solve their supply chain problems by splitting themselves up, in the process creating the companies they need to supply them, without owning them outright or restricting them from working with others in the market. Basically spin-offs that are designed to be spin-offs from the start. Since the current stockholders would have shares in existing company and the new entities, they're not being damaged in the process so they shouldn't be opposed unless maximizing vertical integration is their plan for continued wealth growth.