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That would be the point of spinning it out. They could have an IPO, raise as much capital as there is in the observable Universe, and build enough fabs to satis
by credit_guy 2y ago
That would be the point of spinning it out. They could have an IPO, raise as much capital as there is in the observable Universe, and build enough fabs to satisfy all the demand.
- mike_hearn 2y agoThat wouldn't work. Even TPUv4 was on a 7nm node and you don't just build a 7nm fab just like that. If it were that easy NVIDIA would already be building their own fabs, as they have basically raised as much capital as there is in the known universe (bigger market cap than the entire London stock exchange), but they seem to prefer to let the fab experts get on with it rather than compete with them. LLM AI is largely HBM bottlenecked anyway i.e. Samsung, SK Hynix and Micron are where the supply chain limits enter the picture.
- throwaway48476 2y agoFabless companies that are large enough such as apple front the capital for fab companies like TSMC to build fabs dedicated to their use. They do, in effect, build their own fabs. If the Google TPU group had the inclination they could have done the same. The memory industry just got busted from the covid bubble and are not too keen to jump into the AI bubble.
- ragebol 2y agoThey might front the money, but don't own them. Apple gladly lets someone else own and operate the fabs and take the risk (which is smaller with Apple as a client)
- nsteel 2y agoLet's not forget that a 7nm fab has a very limited period of usefulness for the likes of Apple etc. That leading edge is always moving forward and while it might be financially viable for some aspects of the process to be upgraded to the next node, that's not always the case and that's where TSMC's hundreds of other customers join in and the (now old) equipment can be still used for many more years. Edit: But perhaps with the exclusivity deals, the likes of TSMC are less reliant on spreading the cost over 15+ years than they used to be. To be clear, I was talking about long-term use.
- throwaway48476 2y agoThe leading edge has slowed down a lot. Apple is still selling M1 chips and AMD is just now releasing new models of zen3 AM4 chips.
- throwaway48476 2y agoThere is more co development and risk sharing than you think. TSMC has nodes only apple uses.
- nsteel 2y agoThey do, but as far as I know those nodes are just early/late verisons and tweaks to the main, popular process.
- michaelt 2y agoBut if Apple pays TSMC $$$$$$$$ in advance to build a 2nm node production line especially for Apple, and it turns out the 2nm node doesn't deliver the hoped-for improvements in power efficiency? The money's already spent.
- rpeden 2y agoUnless they've been issuing a ton of new shares recently and then selling them into the market at something resembling the current share price, the amount of capital they've raised is nowhere near their current market cap. But it looks like they've actually been buying back some shares - they've got fewer shares outstanding than they did a year or two ago. Not that it matters much - they've still got plenty of cash and other capital available.
- bearjaws 2y agoThere seems to be this idea that the people who design and operate fabs are infinite, when it's actually a technically demanding job. We don't even have enough McDonald's employees, how the hell are we going to just suddenly have multiple companies creating fabs left and right? TSMC cannot even build their Arizona plant without a shortage of workers.
- Arainach 2y agoEvery time someone says "we don't have enough employees", remember to add "....at the (almost certainly too low) wage being offered".
- Workaccount2 2y agoIntel has been trying to make cutting edge fabs...and we all know how that is going. There is good reason nobody wants to be in the fab business.