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The purchase would both increase Intel's manufacturing capacity and pricing power. There used to be half a dozen x86 manufacturers and I'm sure they've enjoyed

by blihp 5y ago

The purchase would both increase Intel's manufacturing capacity and pricing power. There used to be half a dozen x86 manufacturers and I'm sure they've enjoyed having it down to two (especially when one of them was weak) much more. What's not to love, from their perspective?

Someone1234 5y ago
That they'd be increasing capacity in non-cutting edge fabrication, which doesn't really move the needle for Intel's current position. If the argument is facilities and staff, that's fine. But buying an outdated fab that won't compete with TSM isn't that big of a game changer, Intel already has tons of that.
- digikata 5y ago
  For non power sensitive embedded parts it makes a lot of sense - at least to the point that the pricing could be worked out with customers that want long term high volume commitments.
- barbacoa 5y ago
  Because there is still big money in old nodes. Half of TSMC's revenue last quarter was from nodes >14nm. https://www.anandtech.com/show/16621/tsmc-q1-2021-process-node-revenue-more-7nm-no-more-20nm https://www.anandtech.com/show/16621/tsmc-q1-2021-process-no... Even Nvidia's RTX 3080TI is on an optimized version of Samsung's 10 nm node.
- blihp 5y ago
  tl;dr version: think like a monopolist. Intel has been successfully doing that for decades. While semiconductor fabs don't have the useful life of say a railroad, they are valuable for far longer than the 2-3 years they are in the spotlight. I'm no expert in this area, but as the recent semi shortage demonstrates, it appears today's 'ancient' fab can be viable for at least 20 years if not longer. Given the astronomical costs of both the fab and chip design for current nodes, we're likely to be seeing <=28nm sticking around for far longer to get their payback on the process nodes. So if you're Intel and you gobble up as much of the production capacity as possible, that would seem to be a prudent move as long as you don't overpay relative to how much you'll be able to increase prices with the greater share of the market. Think like Intel probably is: they're not thinking of being one of many semi players, they're thinking of being one of the last 2-3.

by blihp 5y ago

Someone1234 5y ago

That they'd be increasing capacity in non-cutting edge fabrication, which doesn't really move the needle for Intel's current position. If the argument is facilities and staff, that's fine. But buying an outdated fab that won't compete with TSM isn't that big of a game changer, Intel already has tons of that.

digikata 5y ago
For non power sensitive embedded parts it makes a lot of sense - at least to the point that the pricing could be worked out with customers that want long term high volume commitments.
barbacoa 5y ago
Because there is still big money in old nodes. Half of TSMC's revenue last quarter was from nodes >14nm. https://www.anandtech.com/show/16621/tsmc-q1-2021-process-node-revenue-more-7nm-no-more-20nm https://www.anandtech.com/show/16621/tsmc-q1-2021-process-no... Even Nvidia's RTX 3080TI is on an optimized version of Samsung's 10 nm node.
blihp 5y ago
tl;dr version: think like a monopolist. Intel has been successfully doing that for decades. While semiconductor fabs don't have the useful life of say a railroad, they are valuable for far longer than the 2-3 years they are in the spotlight. I'm no expert in this area, but as the recent semi shortage demonstrates, it appears today's 'ancient' fab can be viable for at least 20 years if not longer. Given the astronomical costs of both the fab and chip design for current nodes, we're likely to be seeing <=28nm sticking around for far longer to get their payback on the process nodes. So if you're Intel and you gobble up as much of the production capacity as possible, that would seem to be a prudent move as long as you don't overpay relative to how much you'll be able to increase prices with the greater share of the market. Think like Intel probably is: they're not thinking of being one of many semi players, they're thinking of being one of the last 2-3.