6 ms·

You are correct. Building fabs today only for fabbing much older nodes will not be profitable. You have to target 22nm and below otherwise you can't afford to j

You are correct. Building fabs today only for fabbing much older nodes will not be profitable. You have to target 22nm and below otherwise you can't afford to jump in the semi fab ring.

hajile 3y ago
TSMC is building a lot of new 28nm production with plans to shut down all their older nodes and move everyone over in the next few years. GlobalFoundries (formerly AMD fabs) created a brand-new 22nm planar process specifically for older chips as an upgrade to other company's 28nm processes. Profits seem possible if you approach it the right way.
- throwup238 3y ago
  The math works out a lot better when you’re upgrading pre-EUV fabs or expanding an existing facility. A lot of the gear and setup is mostly the same such as wafer cleaning, HVAC and isolation, etc and the local challenges to setup and labor have been figured out.
  - ls612 3y ago
    Whatever is the best they can make a DUV, planar process do will be used for decades to come.
- FirmwareBurner 3y ago
  We're talking about different things here. I was talking about building new fabs for 28nm nodes and you're talking about TSMC upgrading existing fabs from older nodes to 28nm production. Of course upgrading an existing older "sunk-cost" fab to 28nm production will be profitable, but not building a new one from scratch just for that same older node.
  - AnthonyMouse 3y ago
    But now this makes the subsidies angle make more sense: You subsidize initial construction and then the domestic plant remains online indefinitely because the construction is a sunk cost and the incremental cost of upgrades over time is sustainable.
zozbot234 3y ago
You will always have pure analog electronics and other bespoke things that basically don't benefit from anything finer than these nodes. Even for digital chips, it makes no sense to use leading edge nodes for very simple logic where a lot of the area is just contact pads.
- janekm 3y ago
  But you can only really make those profitably for a few industries (military, medical, seismic come to mind). The EU does have the chip fabs for those industries, of course...
  - phkahler 3y ago
    >> But you can only really make those profitably for a few industries I think it's more like they're only profitable if the equipment is already paid for. And even then the margins may be low.
  - eternauta3k 3y ago
    Power electronics are a mainstream, very profitable market.
- jacquesm 3y ago
  It's not about what you can do or can't do. It is about what you can do profitably and that's a completely different thing.
  - voakbasda 3y ago
    I have to wonder if the ability to profit depends entirely on the established cartel of semiconductor manufacturers. They determine the current prices of chips in the marketplace. If entering that marketplace requires competing with them, then I am not sure anyone that is not already in the market can ever win. The margins are too low and the startup costs are too high. Government intervention seems to be the only possible solution, and that option hardly sounds viable when considering that cartel’s collective lobbying power.
cduzz 3y ago
"But I've got a product that's certified with this part that's running on a 40nm process that has these specifications that are deeply tied to features of that 40nm process; things like voltage ranges and temperature tolerances! If you force me to switch to a comparable but not identical part at 22nm I'll have to re-certify my widget with 18 different regulatory agencies!"
- Someone 3y ago
  If those are your needs, you order all the parts you need over your product’s lifetime up-front or get (= pay for) a contract with the manufacturer that makes them promise to sell you the parts for X years (they probably wouldn’t keep producing old parts, but would stockpile enough of them to be able to deliver working ones years later) (Or you prepare for having to go to eBay for working parts. https://www.nytimes.com/2002/05/12/us/for-parts-nasa-boldly-goes-on-ebay.html https://www.nytimes.com/2002/05/12/us/for-parts-nasa-boldly-...)
  - kjs3 3y ago
    There are companies (I've used Rochester Electronics) that both stockpile and manufacture legacy chips specifically for the long tail support situations.
Workaccount2 3y ago
There might be an argument then that it would be worth it for the state to take the hit. If shit hits the fan and you have zero semi-manufacturing, then you are going to be pretty screwed.
- qwytw 3y ago
  > If shit hits the fan and you have zero semi-manufacturing, then you are going to be pretty screwed. I don't really understand this claim at all. Chips are not exactly fungible, unless you force your local companies to use you "state sponsored chips" in their products just being able to produce "chips" wouldn't be that useful. What are you going to do with them?
  - 15155 3y ago
    Guide munitions if needed.
black_puppydog 3y ago
So the cost of building a fab hasn't come down in the last decades, huh? Genuinely asking, is there some^W^W^W what is the "uncompressible" cost in fab-fabbing? I'd totally guess that staff and the building itself are not it?

You are correct. Building fabs today only for fabbing much older nodes will not be profitable. You have to target 22nm and below otherwise you can't afford to jump in the semi fab ring.

hajile 3y ago

TSMC is building a lot of new 28nm production with plans to shut down all their older nodes and move everyone over in the next few years. GlobalFoundries (formerly AMD fabs) created a brand-new 22nm planar process specifically for older chips as an upgrade to other company's 28nm processes. Profits seem possible if you approach it the right way.

throwup238 3y ago
The math works out a lot better when you’re upgrading pre-EUV fabs or expanding an existing facility. A lot of the gear and setup is mostly the same such as wafer cleaning, HVAC and isolation, etc and the local challenges to setup and labor have been figured out.
- ls612 3y ago
  Whatever is the best they can make a DUV, planar process do will be used for decades to come.
FirmwareBurner 3y ago
We're talking about different things here. I was talking about building new fabs for 28nm nodes and you're talking about TSMC upgrading existing fabs from older nodes to 28nm production. Of course upgrading an existing older "sunk-cost" fab to 28nm production will be profitable, but not building a new one from scratch just for that same older node.
- AnthonyMouse 3y ago
  But now this makes the subsidies angle make more sense: You subsidize initial construction and then the domestic plant remains online indefinitely because the construction is a sunk cost and the incremental cost of upgrades over time is sustainable.

zozbot234 3y ago

You will always have pure analog electronics and other bespoke things that basically don't benefit from anything finer than these nodes. Even for digital chips, it makes no sense to use leading edge nodes for very simple logic where a lot of the area is just contact pads.

janekm 3y ago
But you can only really make those profitably for a few industries (military, medical, seismic come to mind). The EU does have the chip fabs for those industries, of course...
- phkahler 3y ago
  >> But you can only really make those profitably for a few industries I think it's more like they're only profitable if the equipment is already paid for. And even then the margins may be low.
- eternauta3k 3y ago
  Power electronics are a mainstream, very profitable market.
jacquesm 3y ago
It's not about what you can do or can't do. It is about what you can do profitably and that's a completely different thing.
- voakbasda 3y ago
  I have to wonder if the ability to profit depends entirely on the established cartel of semiconductor manufacturers. They determine the current prices of chips in the marketplace. If entering that marketplace requires competing with them, then I am not sure anyone that is not already in the market can ever win. The margins are too low and the startup costs are too high. Government intervention seems to be the only possible solution, and that option hardly sounds viable when considering that cartel’s collective lobbying power.

cduzz 3y ago

"But I've got a product that's certified with this part that's running on a 40nm process that has these specifications that are deeply tied to features of that 40nm process; things like voltage ranges and temperature tolerances! If you force me to switch to a comparable but not identical part at 22nm I'll have to re-certify my widget with 18 different regulatory agencies!"

Someone 3y ago
If those are your needs, you order all the parts you need over your product’s lifetime up-front or get (= pay for) a contract with the manufacturer that makes them promise to sell you the parts for X years (they probably wouldn’t keep producing old parts, but would stockpile enough of them to be able to deliver working ones years later) (Or you prepare for having to go to eBay for working parts. https://www.nytimes.com/2002/05/12/us/for-parts-nasa-boldly-goes-on-ebay.html https://www.nytimes.com/2002/05/12/us/for-parts-nasa-boldly-...)
- kjs3 3y ago
  There are companies (I've used Rochester Electronics) that both stockpile and manufacture legacy chips specifically for the long tail support situations.

Workaccount2 3y ago

There might be an argument then that it would be worth it for the state to take the hit. If shit hits the fan and you have zero semi-manufacturing, then you are going to be pretty screwed.

qwytw 3y ago
> If shit hits the fan and you have zero semi-manufacturing, then you are going to be pretty screwed. I don't really understand this claim at all. Chips are not exactly fungible, unless you force your local companies to use you "state sponsored chips" in their products just being able to produce "chips" wouldn't be that useful. What are you going to do with them?
- 15155 3y ago
  Guide munitions if needed.

black_puppydog 3y ago

So the cost of building a fab hasn't come down in the last decades, huh? Genuinely asking, is there some^W^W^W what is the "uncompressible" cost in fab-fabbing? I'd totally guess that staff and the building itself are not it?