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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
by 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 agoWhy 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 agoRight 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 agoI'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.
- sofixa 3y agoBut the whole problem at Intel is that they're not at the level of TSMC, they're years and generations behind. Splitting them up won't just magically make the fab business be better, and without the profit margins of the sale of processors it's unlikely they'll have the resources to invest to get them to be good. Case in point: AMD are doing very well after spinning off their fabs, but their fabs are not doing very well (relatively of course - they're just stuck to where they split and haven't had meaningful advances; but they're still a profitable business because those older chips are needed too).
- goodbyesf 3y ago> It takes billions and billions of dollars Apple and Microsoft are trillion dollar companies ( both nearing $3 trillion market caps ). They can afford it. Heck they have the balance sheet to acquire both tsmc and samsung if either were up for sale. I thought Apple was moving towards being a full-stack company. Where all the hardware and software is developed in-house. If anyone has the resources, it is apple.
- aleph_minus_one 3y ago> I thought Apple was moving towards being a full-stack company. Where all the hardware and software is developed in-house. If anyone has the resources, it is apple. Having a modern chip fab binds an insane amount of capital, and makes you much more vulnerable in case of market turbulences. This is exactly a reason why there exist people who like to claim that Intel should spin off their fabs.
- andy_ppp 3y agoDepends how those market turbulences occur, for example a Chinese invasion of Taiwan will be a disaster for Apple.
- scarface_74 3y agoIt would be value destructive for Apple to buy TSMC and not service any other customers
- sassy_quat 3y ago[dead]
- jasonwatkinspdx 3y agoIt's insanely hard. TSMC is so dominant because they have very, very, deep institutional knowledge. Even if you have billions to invest it's not easy to create that, and definitely impossible to do it short term. There's only 3 companies left chasing smaller nodes. Everyone else has given up and are focusing on revenue from high volume parts in older processes.
- Flameancer 3y agoThe only three are Samsung, Intel, and TSMC. Idk why going on with Intel but Samsung should BSs doing better but that institutional knowledge that TSMC has is crazy. They all technically invest in asml that makes the machines. If I had to redo my education I’d get into electrical engineering just for this.
- B1FF_PSUVM 3y ago> I’d get into electrical engineering just for this I get the impression it's mostly physics guys.
- lethal-radio 3y agoEverything is physics when you get down to the fundamentals.
- doubloon 3y agoSo "Chemistry, the central science" did not convince you?
- aleph_minus_one 3y ago> Everything is physics when you get down to the fundamentals. Relevant xkcd: https://xkcd.com/435/ https://xkcd.com/435/ TLDR: Math is not. :-)
- EVa5I7bHFq9mnYK 3y agoNah, neither physics nor electrical engineering. It's all chemistry at TSMC.
- frakkingcylons 3y agoBuilding and operating a fab is an extremely difficult and expensive task that will take at least 5-10 years to bear fruit. That makes it a high-risk venture which is hard to sell to the board and investors. More importantly, the new chip production lines are dependent on hyper-specialized EUV lithography systems that only company is able to manufacture (ASML). ASML has their own limits to production too.
- deleted 3y ago[deleted]
- throwaway2990 3y ago> retake Taiwan Take Taiwan. You can’t “retake” something you never had.
- buildbot 3y agoTSMC is solving some of the hardest physics, electrical engineering, mechanical engineering, and other kinds of engineering I don't even know about. It's unlikely anyone catches up to them in terms of lithography ability for a long, long time given how well they've executed 45nm and lower nodes.
- Flameancer 3y agoMore like ASML is solving the physics problems and TSMC is the one with the most capital and experience to run their EUV machines. It’s not that other competitors don’t exist, it’s more like they’ve given up or can’t keep up. Global foundations I believe isn’t making the investment past 16nm. Samsungs latest node doesn’t perform as good as TSMC and intel is being intel.
- aleph_minus_one 3y ago> Global foundations I believe isn’t making the investment past 16nm. GlobalFoundries' Fab 1 can do 1 nm, and its Fab 8 is capable of doing 14 nm: > https://en.wikipedia.org/w/index.php?title=GlobalFoundries&oldid=1183553259#Fabrication_foundries_in_operation https://en.wikipedia.org/w/index.php?title=GlobalFoundries&o...
- tedunangst 3y ago1 nm is very impressive.
- aleph_minus_one 3y agoI meant 12 nm. Sorry for the typo. :-(
- bri3d 3y agoNo. I don’t know where this oft-repeated semiconductor meme came from, but it’s a really poor take. ASML are solving a small subset of physics problems: how to project extremely small features. TSMC are solving many more physics problems: how to structure layers of doped silicon into transistors, how to structure those transistors into logic gates, and those logic gates into functional blocks. This is why silicon process is not just a matter of capital investment, and why nobody is going to show up overnight with 10 billion dollars and change things. It’s not that TSMC are the only ones with a big bag of cash to give ASML.
- Nokinside 3y agoEnter? Companies are trying to keep up. Just few years ago was four companies doing the bleeding edge: Intel, GlobalFoundries, Samsung and TSMC. Intel was the best. First Global Foundries could not keep up. Then Intel fumbled ant TSMC became the best. Samsung is the only one keeping up with TSMC but they come slightly behind. Intel tries to catch up the two. No companies have "exited" they just can't compete. The bleeding edge semiconductor node design is like doing Apollo moon program every 4-5 years. Only one can be the best.
- scarface_74 3y agoTSMC makes a lot of money from fabricating chips on old technology using fully depreciated assets. No new competitor is going to spend billions today to fab chips on older technology.
- tester756 3y ago>Why aren't any other companies entering this space? There are? INTC and Samsung? >falling exclusively under PROC control It wouldnt fall under PROC control. It would be destroyed.
- keep_reading 3y agoThe USA would certainly bomb it if they had to
- OoooooooO 3y agoTSMC fabs have bombs build in to destroy everything if PROC invades I've read.
- gruez 3y agoThat's a bit hyperbolic don't you think? Sure, they're the only game in town when it comes to the leading edge nodes (eg. 3nm), but there's plenty of options at 14 nm and above. That corresponds to AMD zen (released in 2017) and Intel skylake (released in 2015). They're significantly worse than the latest and greatest CPUs today, but they're still in use today. I'd hardly call that as "going back to the stone age".
- jasonwatkinspdx 3y agoYou read bullshit.
- aseipp 3y agoI also have a bridge I can sell you. And trust me: you've never seen one like this, at rates like I'm offering! Buy now!
- blackoil 3y agoAnd, If china bombs ASML we'll be back to stone age.
- nradov 3y ago
- ksec 3y ago>it's not like the market couldn't bear more competitors. The market could only bear if they are willing to pay a lot more in the name of diversification. Otherwise most would simply have trouble keeping up. We really need some basic FAQ on HN for hardware technology related topic.
- deepnotderp 3y agoIt’s not for a lack of trying on Samsung’s and intel’s part that tsmc is dominant ;)
- thoiu2342343 3y agoIt's worse. It's one company in a 'contested' territory. So much so that US military is rumored to have considered the 'samson option' of bombing the TSMC facility were the PLA to occupy the island. Taiwan (unlike Ukraine) is far too critical to the world economy.
- blackoil 3y agoBy internal and external claims, Intel is on track to be competitive with TSMC by 2025. And, Nvidia and other will use the capacity as soon it is available.
- huytersd 3y agoAnd TSMC uses the ASML fabrication machines made by… one company. Basically two places are responsible for all of those chips. Intel really needs to get back in the game. Hopefully that’s still on the table.
- thfuran 3y agoEven if Intel could spin up a bunch of fabs competitive with tsmc, they'd still be competing for asml's capacity. We just can't massively scale up leading edge fab capacity.
- esskay 3y ago> Why aren't any other companies entering this space? Because it would take over a decade to build a comparable chip fab and thats assuming you had unlimited cash to throw at it. You'd be spending billions with zero revenue for a decade and no guarantees it'll be anything as close to as good as TSMC's setup. Try finding someone willing to invest in that and it becomes clear why theres not more chip fabs out there.
- sofixa 3y ago> It feels like China and the U.S. are on a path to war in the next decade or so IMO, MAD (mutually assured destruction - if a nuclear power start a war with another nuclear power, both will probably end up destroyed by nukes) makes the prospects of that highly unlikely.
- red-iron-pine 3y ago> It feels like China and the U.S. are on a path to war in the next decade or so they are literally having discussions in San Fran right now to reduce the likelihood of that happening. And it sounds like China is quite open to discussion, and the US as well.
- NicoJuicy 3y agoWell. China is promising things and they'll ignore it as usual until they are sure to have the upperhand. They are building navy fleet like no other. Still harassing neighbors ( eg. Philippines). Nothing changed. They just want a bigger advantage.