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...no? Leading-edge semiconductor manufacturing is incredibly difficult. Keeping pace with it is nearly impossible. Many companies and entire countries have tri

...no? Leading-edge semiconductor manufacturing is incredibly difficult. Keeping pace with it is nearly impossible. Many companies and entire countries have tried - and failed, over and over and over. You can't just throw billions of dollars at the problem and hope you solve it. It is far, far smarter to design the chips and leave the manufacturing to others who will have the expertise and take on the risk.

amelius 1y ago
There isn't that much competition, and don't forget about recent silicon fabbing shortages.
- Night_Thastus 1y ago
  TSMC isn't 'that much' competition? Good luck beating them at it. They're essentially the only game in town for top-end silicon. AMD tried, realized it was completely pointless and split off into Global Foundries. The giant Intel struggled incredibly hard with the 10nm node and has now lost significant ground because of it. Leading edge silicon is ruthless. You can burn hundreds of billions of dollars a year trying to catch up and if your product is even slightly worse it may as well be worthless - all the cost with none of the demand. Going into older nodes is far more forgiving, but you can't make GPUs with that.
  - lossolo 1y ago
    It's only a matter of time, SMIC will have all the funding it needs. They've hired former TSMC staff, and they have Huawei as a research hub, with its 30,000 person research campus. Huawei is also working on its own EUV machines and researching the next generation of chip-making technologies. China has some of the best technical universities in the world. Many of the names you see in the U.S. AI/ML space are Chinese — and a significant number have returned to China, seeking new opportunities. The world has changed. By 2035, China could be on par with TSMC, or even surpass it. Once, there were Nokias and Kodaks — and like them, TSMC will eventually face real competition. Nothing is eternal. TSMC doesn't possess secret knowledge that others can't obtain or special brains that others cannot match. China’s future security and competitive edge depend on becoming self-sufficient in advanced node production. They now have all the necessary ingredients, more than anyone before, to challenge and possibly overtake TSMC. It's only a matter of time.
    - Night_Thastus 1y ago
      I agree - SMIC could in theory do it, if the government pours money on them and rigs everything in their favor as much as possible. (And a healthy bit of IP theft) But they definitely aren't there right this second.
  - amelius 1y ago
    > They're essentially the only game in town for top-end silicon If so, then why aren't we paying them 30% of our revenue like in the AppStore?
    - Night_Thastus 1y ago
      If you want to secure most of TSMC's top-end fabrication for a given year, you do pay a premium. Apple did so, and paid so much money they accounted for a quarter of all of TSMC's reveue in 2024; over 20 billion dollars just from Apple alone.
      - amelius 1y ago
        This sounds like a good reason for nVidia to start their own fab then.
        Night_Thastus 1y ago
        Nvidia could certainly try, and they'd likely burn 100s of billions of dollars just to inevitably fail like everyone else who has ever tried.
        Jlagreen 1y ago
        Nvidia would probably not fail because they work already very closely with TSMC and have teams sitting there directly. Also Nvidia could even afford to burn 100s of billions of dollars since they are becoming the most profitable company in the world with probably passing Apple this year. BUT then Nvidia would compete with TSMC and that is a problem because Nvidia is building up a cash and supply moat. Why should Nvidia build TSMC competition if they can simply buy 95% of the packaging supply at TSMC so competitors like AMD and others struggle to get supply? By booking everything at TSMC, Nvidia can easily keep their market share even if competitors improve their products. This is a huge differences to many industries where most companies have their own production. Imagine there would be only 1 car manufacturer and all other car companies would only design. And now 1 car company would book 100% of supply from the manufacturer. What would the other car design companies do? They would get out of business even if they design better cars. Nvidia has done this before and that was in the 90s. By speeding up design and releasing new products and more products 2-3x faster than any competitor. The result was that from 90 competitors in 1993, there was only 1 left in 2003 for Nvidia in gaming GPUs. And Nvidia is doing that again by speeding up their roadmap cadence and as well as booking all supply. Nvidia is crashing competition not only with a great product but by removing their competitors' option to place their product in the market.

amelius 1y ago

There isn't that much competition, and don't forget about recent silicon fabbing shortages.

Night_Thastus 1y ago
TSMC isn't 'that much' competition? Good luck beating them at it. They're essentially the only game in town for top-end silicon. AMD tried, realized it was completely pointless and split off into Global Foundries. The giant Intel struggled incredibly hard with the 10nm node and has now lost significant ground because of it. Leading edge silicon is ruthless. You can burn hundreds of billions of dollars a year trying to catch up and if your product is even slightly worse it may as well be worthless - all the cost with none of the demand. Going into older nodes is far more forgiving, but you can't make GPUs with that.
- lossolo 1y ago
  It's only a matter of time, SMIC will have all the funding it needs. They've hired former TSMC staff, and they have Huawei as a research hub, with its 30,000 person research campus. Huawei is also working on its own EUV machines and researching the next generation of chip-making technologies. China has some of the best technical universities in the world. Many of the names you see in the U.S. AI/ML space are Chinese — and a significant number have returned to China, seeking new opportunities. The world has changed. By 2035, China could be on par with TSMC, or even surpass it. Once, there were Nokias and Kodaks — and like them, TSMC will eventually face real competition. Nothing is eternal. TSMC doesn't possess secret knowledge that others can't obtain or special brains that others cannot match. China’s future security and competitive edge depend on becoming self-sufficient in advanced node production. They now have all the necessary ingredients, more than anyone before, to challenge and possibly overtake TSMC. It's only a matter of time.
  - Night_Thastus 1y ago
    I agree - SMIC could in theory do it, if the government pours money on them and rigs everything in their favor as much as possible. (And a healthy bit of IP theft) But they definitely aren't there right this second.
- amelius 1y ago
  > They're essentially the only game in town for top-end silicon If so, then why aren't we paying them 30% of our revenue like in the AppStore?
  - Night_Thastus 1y ago
    If you want to secure most of TSMC's top-end fabrication for a given year, you do pay a premium. Apple did so, and paid so much money they accounted for a quarter of all of TSMC's reveue in 2024; over 20 billion dollars just from Apple alone.
    - amelius 1y ago
      This sounds like a good reason for nVidia to start their own fab then.
      - Night_Thastus 1y ago
        Nvidia could certainly try, and they'd likely burn 100s of billions of dollars just to inevitably fail like everyone else who has ever tried.
        Jlagreen 1y ago
        Nvidia would probably not fail because they work already very closely with TSMC and have teams sitting there directly. Also Nvidia could even afford to burn 100s of billions of dollars since they are becoming the most profitable company in the world with probably passing Apple this year. BUT then Nvidia would compete with TSMC and that is a problem because Nvidia is building up a cash and supply moat. Why should Nvidia build TSMC competition if they can simply buy 95% of the packaging supply at TSMC so competitors like AMD and others struggle to get supply? By booking everything at TSMC, Nvidia can easily keep their market share even if competitors improve their products. This is a huge differences to many industries where most companies have their own production. Imagine there would be only 1 car manufacturer and all other car companies would only design. And now 1 car company would book 100% of supply from the manufacturer. What would the other car design companies do? They would get out of business even if they design better cars. Nvidia has done this before and that was in the 90s. By speeding up design and releasing new products and more products 2-3x faster than any competitor. The result was that from 90 competitors in 1993, there was only 1 left in 2003 for Nvidia in gaming GPUs. And Nvidia is doing that again by speeding up their roadmap cadence and as well as booking all supply. Nvidia is crashing competition not only with a great product but by removing their competitors' option to place their product in the market.