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Manufacturing costs force them to go down the chiplet path. Its actually impressive they can remain competitive at all given TSMCs margin of 67%. [0] If Intel F

Manufacturing costs force them to go down the chiplet path. Its actually impressive they can remain competitive at all given TSMCs margin of 67%. [0] If Intel Foundry manages to keep up with TSMC, thats a lot of pricing power advantage over AMD. Or they could make lower-power CPUs that would be uneconomical for AMD. [0] https://www.macrotrends.net/stocks/charts/TSM/taiwan-semiconductor-manufacturing/ebitda-margin https://www.macrotrends.net/stocks/charts/TSM/taiwan-semicon...

tankenmate 4y ago
But don't forget that TSMC's margins for massive bulk purchasers like AMD will be lower than the average.
- logimus 4y ago
  Yup, obviously they are aware of AMD competition and can adjust their margins accordingly.
- MrBuddyCasino 4y ago
  Does TSMC even have non-bulk customers at 7nm/5nm/4nm? I would have thought the mask costs are so high that it isn't economical except for the biggest companies.
  - mastax 4y ago
    Cerebras has probably bought less than 100 7nm wafers, total. Though they may have gotten many more sales than the last I checked. Tesla Dojo is probably about the same. I've seen loads of random chips like that on 7nm. I guess it depends what you consider "bulk".
  - shaunsingh0207 4y ago
    7nm yes, 5nm/4nm not as much, apple pretty much bought out the entirety of 3nm. 7nm is a relatively mature process at this point.
lotsofpulp 4y ago
Why is EBITDA margin better in this context than net margin? Wouldn’t manufacturing facilities have a ton of depreciation and amortization that should be incorporated into the costs?
- brookst 4y ago
  Gross margin is the appropriate measure of per unit cost/profit. Yes, EBITDA is not a good measure at all (for part economics).
narrator 4y ago
Intel can't figure out how to make the next generation of chips. They used to be able to innovate on a steady regular basis, but they're still trying to get 7nm right and they've been working on that for many years while TSMC is on to 3nm. Makes you wonder what happened to that company that they got so far behind.

tankenmate 4y ago

But don't forget that TSMC's margins for massive bulk purchasers like AMD will be lower than the average.

logimus 4y ago
Yup, obviously they are aware of AMD competition and can adjust their margins accordingly.
MrBuddyCasino 4y ago
Does TSMC even have non-bulk customers at 7nm/5nm/4nm? I would have thought the mask costs are so high that it isn't economical except for the biggest companies.
- mastax 4y ago
  Cerebras has probably bought less than 100 7nm wafers, total. Though they may have gotten many more sales than the last I checked. Tesla Dojo is probably about the same. I've seen loads of random chips like that on 7nm. I guess it depends what you consider "bulk".
- shaunsingh0207 4y ago
  7nm yes, 5nm/4nm not as much, apple pretty much bought out the entirety of 3nm. 7nm is a relatively mature process at this point.

lotsofpulp 4y ago

Why is EBITDA margin better in this context than net margin? Wouldn’t manufacturing facilities have a ton of depreciation and amortization that should be incorporated into the costs?

brookst 4y ago
Gross margin is the appropriate measure of per unit cost/profit. Yes, EBITDA is not a good measure at all (for part economics).

narrator 4y ago

Intel can't figure out how to make the next generation of chips. They used to be able to innovate on a steady regular basis, but they're still trying to get 7nm right and they've been working on that for many years while TSMC is on to 3nm. Makes you wonder what happened to that company that they got so far behind.