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Exactly. It takes tens of billions to develop a new node, and it's increasing exponentially over time. Your strategy can't be "I'm going to spend $20b on a proof of concept at 18A, and hopefully that will lead to sales on 14A, which will cost $30b to develop" unless the goal is to go bankrupt.
My opinion is that the pace of shrink dropping is extremely negative for leading edge fabs, including TSMC.
It means the performance gap between leading edge and trailing edge will shrink over time, and that will provide an opening for the Chinese fabs to catch up. They will not be blocked on...
Ultimately it comes down to the economics of the node.
If 18A doesn’t have enough volume to pay off the capex in 3-5 years, then the only way to make the numbers work is to try and drag out the life of the node. But then the next node is delayed and Intel will have an even bigger problem at 14A.
I have no doubt that every semiconductor company is looking at 18A, because there is a lot of information that can be gleaned at very little cost, and maybe a lot of upside if things work out. But at the end of the day Intel needs a very cost competitive process and that's where I think they...
In terms of Intel projections… surely in all investor presentations and announcements you’d have seen a long list of disclaimers providing legal cover for making announcements that are not outright fraud but very optimistic projections or numbers that are manipulated.
A agreement could be...
My own personal experience is that once a mega project like this stalls out, it is very rare that it can be resurrected.
I have seen multibillion dollar project abandoned, because the economic conditions that justify investments of that scale are typically a moment in time, and if you fail to...
Can you clarify what you mean here? Are you saying Intel is not a relatively small percentage of TSMC revenue? Or something else. Because I would guess than Intel is less than 20% of TSMC revenue vs 90%+ of Intel Foundry revenue. Who is going to have a bigger problem if Intel product volumes...
Intel is a relatively small percentage of TSMC revenue, and if Intel misses a product cycle, chances are people will be buying chips from AMD or someone else who can pick up the capacity.
They don't need to build leading edge foundries to be competitive. There is more than an order of magnitude difference between the capex requirements.
Intel was successful until their product volumes were no longer enough to justify the capex.
It was many people's opinion that the IDM business model was still viable for the last 10 years and they have all been proven wrong. If Lip Bu does not realize this soon he will be another person on the scrap heap of former Intel CEOs (honestly not a bad place to be since most of these guys...
Please say "Intel just needs to out execute TSMC for the next 10 years" like that's an easy thing to do. First, TSMC is very good at executing, and execution comes down to having the right org structure and culture. Second, executing on the wrong strategy is worse than not executing at all...
I'd argue that Intel lost it's manufacturing lead as a result of mobile, because that gave TSMC the volumes needed to invest and surpass Intel. TSMC wouldn't be where it is today if it hadn't been for the mobile market.
I'd also argue that constraints on Intel 7 is because they wanted to shift...
Intel does not have enough volume on it's own to fill a leading edge fab. That's the fundamental problem. That's been the problem since mobile, because leading edge volume moved to mobile chips instead of PC CPUs, and Intel didn't have competitive mobile products.
So what did Intel do...
This is a very naive idea. In practice, manufacturers do not want to reduce pricing except as a last resort. Typically, a 10-15% price drop won't create enough extra sales of offset the loss of income from the price decline, and price drops have a tendency to become permanent as customers...
If this is the "not TSMC" market, than whoever is "not TSMC" is guaranteed to go bankrupt. Not because TMSC never lacks capacity, but because by definition if you always have extra capacity, that means your business model requires you to run underutilized, and an underutilized fab is a money...
Is there really a NOT TSMC market? I'm not convinced. Yes companies want to be able to second source, but it's a little like saying "AMD could be successful if they just focus on the not Intel Market", in the early 2000s when Intel had a large competitive advantage. It wasn't until AMD changed...
It's funny that we disagree on this, considering a came to the conclusion that the fabless model had completely shifted the semiconductor landscape after reading your book :)
I guess we will see in a few years if Intel's IDM strategy will work out under Lip-Bu Tan.
