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> You might see a cartel form instead of a competative market place, which is a setup where the higher margin is protected. Wouldn't it more likely be that pla
by onlyrealcuzzo 3y ago
> You might see a cartel form instead of a competative market place, which is a setup where the higher margin is protected.
Wouldn't it more likely be that players just carve out niches for themselves in the high-end space where they DON'T compete?
If you're Intel - it seems like a fools errand to spend $50B to maybe take some of TSMC's customers.
You'd probably rather spend $10B to create a new market - which although smaller - you can dominate, and might become a lot larger if you execute well.
- ethbr1 3y agoI figured you'd see margin compression from the major, volume-limited buyers: e.g. Apple, Nvidia, etc. Paying a premium to get a quota with TSMC looks different, if there's competitive capacity, at least for large customers who can afford to retask their design teams to target a different process. Even if only as a credible stalking horse in pricing negotiations with TSMC.