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If they “can’t make the chips fast enough” being TSMC’s second highest volume customer behind Apple and probably second in priority, what chance does Microsoft

If they “can’t make the chips fast enough” being TSMC’s second highest volume customer behind Apple and probably second in priority, what chance does Microsoft have getting enough of TSMCs capacity?

donatzsky 3y ago
Microsoft does have the benefit of not having any customers other than themselves, so volumes are smaller.
tambre 3y ago
They're more constrained by advanced packaging (CoWoS) capacity rather than the manufacturing of the silicon.
- tyfighter 3y ago
  But from the pictures, the Maia 100 is also using CoWoS packaging. That will be necessary for any new HBM chip.
- localhost 3y ago
  The latest Stratechery interview had Pat Gelsinger on it and he was talking about how Intel is happy to package up TSMC dies in their foundries. Relevant quote: > So it really brings together many of the things that Intel is doing as an IDM, now bringing it together in a heterogeneous environment where we’re taking TSMC dies. We’re going to be using other foundries in the industry, we’re standardizing that with UCIe. So I really see ourself as the front end of this multi-chip chiplet world doing so in the Intel way, standardizing it for the industry’s participation with UCIE, and then just winning a better technology.
tw04 3y ago
> what chance does Microsoft have getting enough of TSMCs capacity? Looking at their balance sheet: plenty. TSMC is all about pay to play. Apple is first in line because they’re willing to pay to be first in line. I have no doubt Microsoft can justify spending the money they save not buying nvidia into getting some priority access from TSMC. Also keep in mind Apple is now on 3nm so there’s likely spare 5nm.
- fragmede 3y ago
  In exchange for paying to build out TSMC's 3mm capacity, Apple gets exclusive rights to use it for the next N years. Who knows what other exclusivity deals or other shenanigans are in place that would prevent Microsoft from acquiring capacity?
- sargun 3y ago
  My guess is that Microsoft booked capacity years ago. Either by strategic decision, with the belief they could yield the capacity to someone else, or through their other hardware divisions (see: Xbox). It’s very likely they knew something like this was coming, as they’ve been doing FPGAs for more than a decade now.
StevePerkins 3y ago
It blows my mind that not only are Apple, Nvidia, and all other enormous "chip makers" fabless... but there's ONE single company actually making the majority of all their chips. Why aren't any other companies entering this space? TSMC's growth and profits are immense, it's not like the market couldn't bear more competitors. Also, the current situation is geopolitical insanity. It feels like China and the U.S. are on a path to war in the next decade or so. China is itching to retake Taiwan... and if you thought the U.S. fought a lot of wars over oil, there's NO WAY we wouldn't go to war to prevent all the world's most important semiconductors falling exclusively under PROC control. It's the 21st century, we would have no choice. I know that TSMC is diversifying and building fabs in the U.S. and Germany, and hopefully that will reduce the risk of war. But it's just nuts that this is even a risk. How does one company control so much of the global market?
- bluedino 3y ago
  Why doesn't anyone enter? It takes billions and billions of dollars, tons of knowledge and if you get it wrong...even Intel screwed it up, and they are one of the only companies would could even try to do it.
  - spiralpolitik 3y ago
    Right now Intel is hamstrung because there is no separation between the fab and design sides. Nobody is going to trust Intel to fab their latest and greatest while the two sides are joined at the hip. The sooner Intel spins out the fab side into its own entity the better positioned it will be to pick up the business that TSMC doesn't have capacity for.
    - michaelt 3y ago
      I've seen plenty of Amazon's competitors running on AWS, plenty of Google's competitors using gmail, and suchlike. People will overlook a lot, if the product is compelling enough and the sales guys can keep a straight face while promising not to peek.
    - 3y ago
Nokinside 3y ago
They buy capacity that is little behind and optimized differently. Apple and Nvidia buy the bleeding edge and develop it with TSCM. Azure Maia is TSMC N5, I think. Nvidia H200 and H100 are TSMC 4N.
UncleOxidant 3y ago
Intel Foundry apparently has some room.

donatzsky 3y ago

Microsoft does have the benefit of not having any customers other than themselves, so volumes are smaller.

tambre 3y ago

They're more constrained by advanced packaging (CoWoS) capacity rather than the manufacturing of the silicon.

tyfighter 3y ago
But from the pictures, the Maia 100 is also using CoWoS packaging. That will be necessary for any new HBM chip.
localhost 3y ago
The latest Stratechery interview had Pat Gelsinger on it and he was talking about how Intel is happy to package up TSMC dies in their foundries. Relevant quote: > So it really brings together many of the things that Intel is doing as an IDM, now bringing it together in a heterogeneous environment where we’re taking TSMC dies. We’re going to be using other foundries in the industry, we’re standardizing that with UCIe. So I really see ourself as the front end of this multi-chip chiplet world doing so in the Intel way, standardizing it for the industry’s participation with UCIE, and then just winning a better technology.

tw04 3y ago

> what chance does Microsoft have getting enough of TSMCs capacity? Looking at their balance sheet: plenty. TSMC is all about pay to play. Apple is first in line because they’re willing to pay to be first in line. I have no doubt Microsoft can justify spending the money they save not buying nvidia into getting some priority access from TSMC. Also keep in mind Apple is now on 3nm so there’s likely spare 5nm.

fragmede 3y ago
In exchange for paying to build out TSMC's 3mm capacity, Apple gets exclusive rights to use it for the next N years. Who knows what other exclusivity deals or other shenanigans are in place that would prevent Microsoft from acquiring capacity?
sargun 3y ago
My guess is that Microsoft booked capacity years ago. Either by strategic decision, with the belief they could yield the capacity to someone else, or through their other hardware divisions (see: Xbox). It’s very likely they knew something like this was coming, as they’ve been doing FPGAs for more than a decade now.

StevePerkins 3y ago

It blows my mind that not only are Apple, Nvidia, and all other enormous "chip makers" fabless... but there's ONE single company actually making the majority of all their chips. Why aren't any other companies entering this space? TSMC's growth and profits are immense, it's not like the market couldn't bear more competitors. Also, the current situation is geopolitical insanity. It feels like China and the U.S. are on a path to war in the next decade or so. China is itching to retake Taiwan... and if you thought the U.S. fought a lot of wars over oil, there's NO WAY we wouldn't go to war to prevent all the world's most important semiconductors falling exclusively under PROC control. It's the 21st century, we would have no choice. I know that TSMC is diversifying and building fabs in the U.S. and Germany, and hopefully that will reduce the risk of war. But it's just nuts that this is even a risk. How does one company control so much of the global market?

bluedino 3y ago
Why doesn't anyone enter? It takes billions and billions of dollars, tons of knowledge and if you get it wrong...even Intel screwed it up, and they are one of the only companies would could even try to do it.
- spiralpolitik 3y ago
  Right now Intel is hamstrung because there is no separation between the fab and design sides. Nobody is going to trust Intel to fab their latest and greatest while the two sides are joined at the hip. The sooner Intel spins out the fab side into its own entity the better positioned it will be to pick up the business that TSMC doesn't have capacity for.
  - michaelt 3y ago
    I've seen plenty of Amazon's competitors running on AWS, plenty of Google's competitors using gmail, and suchlike. People will overlook a lot, if the product is compelling enough and the sales guys can keep a straight face while promising not to peek.
  - 3y ago

Nokinside 3y ago

They buy capacity that is little behind and optimized differently. Apple and Nvidia buy the bleeding edge and develop it with TSCM. Azure Maia is TSMC N5, I think. Nvidia H200 and H100 are TSMC 4N.

UncleOxidant 3y ago

Intel Foundry apparently has some room.