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So much of TSMC's dominance now is due to the influx of Apple cash in the 2010s boosting R&D spending, which in turn is because millenials bought a shit tonne o

So much of TSMC's dominance now is due to the influx of Apple cash in the 2010s boosting R&D spending, which in turn is because millenials bought a shit tonne of Apple devices because they were convinced by marketing.

deleted 2y ago
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wtallis 2y ago
TSMC's dominance is at least as much Intel's fault as it is Apple's. And even if Apple hadn't been funneling so much money to TSMC, the smartphone industry as a whole still would have been a cash cow for TSMC. Intel sure wasn't going to be in the running as a smartphone SoC designer or as a foundry for somebody else's smartphone SoCs. In an alternative history where Android thoroughly beat out iOS even for high-end/high-margin smartphones, Samsung's foundry business probably would have been a bit better off, but overall it would still be TSMC as the leading foundry, just with Qualcomm as the launch customer for new nodes rather than Apple.
- alephnerd 2y ago
  > Intel sure wasn't going to be in the running as a smartphone SoC designer or as a foundry for somebody else's smartphone SoCs Intel did try doing this in the 2000s, but couldn't justify the resourcing needed for this due to x86 as well as their restrictive licensing of Intel Atom. Meanwhile, ARM was fabless and just licensed to anyone (a major reason why Chinese challenger brands exist in the Chips space today) Fundamentally, you cannot be both an IP creator (eg. Design) and chip fabricator, as both functions have different economics and competitive structures, and one BU inevitabely holds the other back. > Samsung's foundry business probably would have been a bit better off, but overall it would still be TSMC as the leading foundry Samsung, SK Hynix, and other Korean players dropped the ball due to the Apple lawsuit as well as the 2016-17 SK-China trade war (impacted SK exports to China - including intermediate parts) and the 2019-23 SK-Japan trade war (a number of critical components in fabrication are supplied by Japanese firms like Tokyo Electron and Nikon and were impacted by mutual tariffs)
  - klooney 2y ago
    > Fundamentally, you cannot be both an IP creator (eg. Design) and chip fabricator, as both functions have different economics and competitive structures, and one BU inevitabely holds the other back. Vertical integration can win too, it worked for Intel for decades.
    - alephnerd 2y ago
      Until it didn't. Most players in the hardware industry try to specialize in one function and do that very well, as this builds your competitive advantage AND allows you to leverage partnerships to further enhance your moat by building an ecosystem. For example, ARM is purely design driven - targeted specifically at low power compute usecases - and licensed it's IP out to just about any player, which allowed an ecosystem to develop. Nvidia did the same thing by remaining fabless and only concentrating on GPUs. TSMC concentrates only on fabrication and doesn't dare enter design because they know all their customers would leave overnight because they would not want to subsidize a potential competitor. Intel was in too many segments, which meant it was inevitably competing with everybody, which forced everyone to leverage partnerships to challenge the big baddie. A similar thing happened to Samsung to a certain extent as well.
- ryao 2y ago
  Apple pays TSMC better than anyone else does since they want the best processes and are willing to pay a premium to cover much of the investment needed to achieve them. Losing them would really hurt TSMC. Not having them in the 10s would have slowed down TSMC’s development of new process technology.

deleted 2y ago

[deleted]

wtallis 2y ago

TSMC's dominance is at least as much Intel's fault as it is Apple's. And even if Apple hadn't been funneling so much money to TSMC, the smartphone industry as a whole still would have been a cash cow for TSMC. Intel sure wasn't going to be in the running as a smartphone SoC designer or as a foundry for somebody else's smartphone SoCs. In an alternative history where Android thoroughly beat out iOS even for high-end/high-margin smartphones, Samsung's foundry business probably would have been a bit better off, but overall it would still be TSMC as the leading foundry, just with Qualcomm as the launch customer for new nodes rather than Apple.

alephnerd 2y ago
> Intel sure wasn't going to be in the running as a smartphone SoC designer or as a foundry for somebody else's smartphone SoCs Intel did try doing this in the 2000s, but couldn't justify the resourcing needed for this due to x86 as well as their restrictive licensing of Intel Atom. Meanwhile, ARM was fabless and just licensed to anyone (a major reason why Chinese challenger brands exist in the Chips space today) Fundamentally, you cannot be both an IP creator (eg. Design) and chip fabricator, as both functions have different economics and competitive structures, and one BU inevitabely holds the other back. > Samsung's foundry business probably would have been a bit better off, but overall it would still be TSMC as the leading foundry Samsung, SK Hynix, and other Korean players dropped the ball due to the Apple lawsuit as well as the 2016-17 SK-China trade war (impacted SK exports to China - including intermediate parts) and the 2019-23 SK-Japan trade war (a number of critical components in fabrication are supplied by Japanese firms like Tokyo Electron and Nikon and were impacted by mutual tariffs)
- klooney 2y ago
  > Fundamentally, you cannot be both an IP creator (eg. Design) and chip fabricator, as both functions have different economics and competitive structures, and one BU inevitabely holds the other back. Vertical integration can win too, it worked for Intel for decades.
  - alephnerd 2y ago
    Until it didn't. Most players in the hardware industry try to specialize in one function and do that very well, as this builds your competitive advantage AND allows you to leverage partnerships to further enhance your moat by building an ecosystem. For example, ARM is purely design driven - targeted specifically at low power compute usecases - and licensed it's IP out to just about any player, which allowed an ecosystem to develop. Nvidia did the same thing by remaining fabless and only concentrating on GPUs. TSMC concentrates only on fabrication and doesn't dare enter design because they know all their customers would leave overnight because they would not want to subsidize a potential competitor. Intel was in too many segments, which meant it was inevitably competing with everybody, which forced everyone to leverage partnerships to challenge the big baddie. A similar thing happened to Samsung to a certain extent as well.
ryao 2y ago
Apple pays TSMC better than anyone else does since they want the best processes and are willing to pay a premium to cover much of the investment needed to achieve them. Losing them would really hurt TSMC. Not having them in the 10s would have slowed down TSMC’s development of new process technology.