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Pumping the oil of the 21st century: TSMC versus INTEL

hist78 said:
"At the same time TSMC can not complain: they got Chips-act money, cheap loan, 35% tax break and loan guarantees by the Taiwan government in the 250 B investment treaty with US. In total it means all the Arizona investments of 165 B$ by TSMC are also heavily subsidized, and they can import chips from Taiwan for 0 tariff for their US customers as long as the Arizona Giga-campus is under construction. So, all this money for TSMC will help them as well to grow their gross margin and net profit margin."

I believe there is an error in your table (or Google's AI generated table) and analysis.

The $250 billion loan credit guarantees are for an additional $250 billion of investment in the United States, this is not part of the $250 billion direct investment in the US (the majority is coming from TSMC). The $250 billion loan guarantees are backed by Taiwan’s government, not by the US government, and not for TSMC, or at least not totally for TSMC.
Click to expand...

It seems NVIDIA's CEO likes the Taiwan-US trade deal very much and praises TSMC as being very important in that deal.

He just arrived in Taiwan for some special events and a hair cut:


https://wccftech.com/nvidia-ceo-to-...ar-dinner-with-taiwanese-partners-this-month/
 
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Daniel Nenni said:
Yes Intel is stronger. Intel is in the lead with BSPD for example. Others are following but Intel is the leader. Packaging revenue will come but it will not be big margins. There really needs to be wafers packaged in there. Again, this is the NOT TSMC packaging market.
Click to expand...
BPSD is not packaging, it is wafer processing.... if you want to say Intel knows how to package it,... fair enough. But <1% of worlds logic wafers made in 2026 and probably even 2027 will be BPSD (obviously only Intel)

I assume by packaging, you mean CoWoS/Foveros type. Is the plan that Intel would package TSMC wafers from external customers onto a Intel Wafer interposer? Or they just choose Intel wafers for Intel packaging?
 
As some people also discussed the efficiency of INTEL's operations regarding R&D and general operations a last table comparing the efficiencies of the "21st century oil producers" TSMC and INTEL, generated by Gemini.

Amazing near constant and very efficient 0.70 ratio of Net Profit Margin / Gross Margin (NPM/GM) by TSMC.

For INTEL that ratio is much smaller, so is/was a much more inefficient company with expensive R&D and SGA. Of course the effective tax rate (ETR) influences that ratio as well (somewhat), but it is clear INTEL was/is never as efficient as TSMC.

It seems TSMC may be moving to an NPM/GM ratio of closer to around 0.75 and with a GM trending to 65% it means their NPM is getting close to 50%.

A NPM of near 50% is simply unbelievable for such a large revenue hardware-tech company, that is growing revenue with a CAGR around 25-30% till around 2030.

TSMC is clearly the most efficient "oil producer" of the 21st century, and producing the "best and most wanted 21st oil".


1769717859037.png
 
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