Hacker News Reader

Comment by ramboldio | Hacker News Reader

"Commoditize your Complement"

It's surprising, how consistently this law applies (and that it's still widely unknown outside the tech bubble).

Pulling a Google Fiber on the chip fabs might not be a bad thing right now -- TSMC is way, way too powerful at the moment. Even Google isn't the driving factor behind a likely military invasion.

Actually there's one other possibility: that this is an audition before Google acqui-hires eFabless.

Can't say I blame them. Running MPW shuttles is an incredibly tough business; of the three leading shuttle providers (MOSIS, IMEC, CMP) two are non-profits affiliated with universities and the third used to be. There isn't a lot of profit in it.

And I can't really blame Google either... Tim Edwards is easily worth the entire company's payroll so they'll be getting a great deal as long as they can keep him interested.

> Google Fiber

Haven't they paused the rollout of this?

Google do not have the commitment, focus, or skillset to compete in ASICs. Certainly not to compete with TSMC themselves. Apple have the design experience now to deliver the M1 - 12 years after acquiring PA Semi. And it's manufactured by .. TSMC.

This has every hallmark of a VP who wants to play with semiconductors, not a serious attempt to deliver something specific.

> Haven't they paused the rollout of this?

Not entirely. I'm not sure if they're still introducing Google Fiber to new cities, but they're definitely still expanding to new neighborhoods in existing cities.

I don't think they even have full saturation in their pilot cities and only see one city added in the last year. Considering Google's tendency to cut projects below a certain size as much I'd love to be a Google fiber customer it's more realistic to expect it to be killed in the next year or two.

> Haven't they paused the rollout of this?

Not at all. In fact, they just finished rolling out 2 Gigabit Fiber[0] where I live (Nashville area).

[0] - https://fiber.google.com/blog/2020/the-next-step-in-speed-ex...

They have to honor existing contracts which keep them on the hook for many years. When Larry announced they were scaling back, he specifically cited this sort of leverage being the biggest concern.

> Pulling a Google Fiber on the chip fabs might not be a bad thing right now -- TSMC is way, way too powerful at the moment. Even Google isn't the driving factor behind a likely military invasion.

TSMC only got so powerful because the competition, especially Intel, were abysmal failures in rolling out new tech. It's not like their Dutch supplier ASML only sells their tech to TSMC, too. Anyone with the cash at hand could buy their stuff.

Also: the last US governments (both Obama and Trump) or the major EU governments could have stepped in any fucking time in the last 10-15 years and say "hey it might be a good idea to have some backup for Intel instead of leaving everything to Taiwan"... only in 2020 TSMC finally announced to build an US fab, and the EU is still sitting on their hands.

Maybe I'm not looking far enough ahead, but how is running 130nm MPWs competing with the TSMC/Samsung level of fabs? I can see how eFabless might have the effect of commoditizing a foundry because you aren't necessarily locked in to their tooling.

But doesn't that principle only sort of hold if the foundry's process itself is sort of a commodity (i.e. mature,old)? Old has worse connotations than I mean, because you can do a lot at fairly large nodes, you just aren't making iPhone SoCs at 130nm.

You'd be surprised how much stuff is made on these old processes. A lot of very security-cricial stuff like Baseboard Management Controllers, lights-out management controllers, and laptop embedded controllers are almost entirely built on pre-OPC (i.e. pre-90nm) processes.

All of those chips are in the "security flaw equals remote root" category.

SkyWater's 130nm process is compatible with on-die flash (unlike most post-90nm and nearly all post-40nm processes). You could do a "secure enclave" or your own Hardware Security Module and not have to worry about backdoors.

But to answer your question directly: this isn't about making an iPhone comeptitor.

Can you expand a little bit?

Usually, the more competition there is in a market segment, the lesser the margin becomes.

Let's say your customer often "complement" your offer A with B from another company. If the other company faces fierce competition on the market for B, its margin will be low. So, you may be able to capture a little bit more of the customer's money: he wants to spend x on both stuff, the less it spends on B, the more it can spend on A.

Read this: https://www.joelonsoftware.com/2002/06/12/strategy-letter-v/

It should be required reading for anyone working in anything software related, these days :-)

Heck, read all of Joel's blog when you have time.

WOW... thanks for sharing that. 18 years later and it all still holds up, and imparts wisdom.

I'm not kidding, read the other articles, at least the "Strategy" ones. Some technical details have changed but many of the fundamental principles still apply ;-)

"The pattern of “commoditizing your complement”, an alternative to vertical integration, where companies seek to secure a chokepoint or quasi-monopoly in products composed of many necessary & sufficient layers by dominating one layer while fostering so much competition in another layer above or below its layer that no competing monopolist can emerge, prices are driven down to marginal costs elsewhere in the stack, total price drops & increases demand, and the majority of the consumer surplus of the final product can be diverted to the quasi-monopolist."

https://www.gwern.net/Complement#:~:text=Joel%20Spolsky%20in...

Reply on news.ycombinator.com