TSMC’s Speciality Technologies

28 nm was a turning point in cost per transistor. Previously, unit cost of transistors declined with gate lengths, but smaller finfet nodes and EUV add enough complexity that cost per transistor is actually rising on more advanced nodes.

The good thing about this is that capacity in "cutting-edge" fans will be lower and lower every year as more products find a "home" node that balances price and performance.

These processes are explicitly not about logic parts like CPUs or GPUs, but analog/power/mixed-signal parts, which don't benefit from smaller node sizes. Many of these parts are made on 0.12/0.18 µm or even bigger nodes because anything smaller is pointless.

> Generally, TSMC’s speciality technologies portfolio includes MEMS, CMOS Image Sensor, Embedded NVM, RF, Analog, High Voltage, and BCD-Power processes.

"Innovation" in the sector always came at tremendous cost. The startup cost for the foundry for a new node has been increasing every generation (requires more wafers and time to amortize over), and the cost per wafer (on a production basis, not including the amortized development cost) has been increasing over time as well (and you're going to be competing with AMD, Nvidia, and Apple for fab space... those are deep pockets to fight against). And finally, the (per customer) development cost at each node is becoming more expensive as well.

All of this means theres tremendous value in exploiting mature processes. And it's going to continue to be this way for quite a long time based on all the trendlines and projections that the big players put out.

It's not just the nodes AFAIK. There's huge demand for EUV machines but they are lower margin products for the company that makes them.

I don't really understand this business, or any business really, so don't take my word for it

I disagree. A lot of the upcoming requirements of transistors just do not need small transistor nodes. For example, for RF applications, power handling needs simply require larger gate lengths. There is no way you can use a 7nm finfet to realize some RF applications.

Innovation in semiconductors takes many forms, not just pushing to lower transistor nodes.

There's a huge underbelly of companies nobody ever hears about holding the technological torch in various industries. Some obscure mittelstand firm in Germany will be the world leader in ball bearings or thermostats or something like that, in a thousand little niches.

TSMC is admittedly must bigger but like these types of firms, they don't need to tell everyone how important they are.

But the only reason why they would need to is for hiring. If they needed to for their business model they would but they don't sell to you or I.

I work for a hedge fund, we have almost no online presence because it just isn't relevant to what the company gets up to.

what's more amazing is that the founder was educated and trained in the US. We let so much talent slip through our fingers

Credit to Taiwan's government for realizing how crucial semiconductors would be and investing in it as a national security strategy. The value of having engineers instead of lawyers leading your nation. A company 95+% of the world wouldn't recognize by name is probably the most important company in the world

TSMC is 100% B2B (business to business).

B2B market dynamics have almost nothing in common with consumer markets. Sales for example is 100% "direct" - you knock on doors and visit to close deals in-person. You can use Zoom et al. but it's only effective once the sale is pretty mature. Most selling is highly technical and requires a face-to-face conversation plus hands-on "proof of value" in "real-time". Such conversations "weave and dodge" like a boxing match so you have to think, respond and sell on your feet. A passive web page or data sheet PDF is merely the 1% of the conversation required to close a deal.

You (in both marketing and sales roles) literally know all the companies in the competitive and customer space, however.

As a result, broadcast advertising is pretty much a waste of money because EVERYONE in such industries has a black book with every person who matters to their product purchase decisions in it and it's not that thick either. The marketing and selling process has so many intangibles and goodwill that this is the only way it works. This is also why direct sales is so high paying as a profession.

In just one area we sell into, there are literally 100 people on the planet who know anything about the market space. The market cap happens to be $10B-$25B depending on what you include so it's well worth the effort.

I literally know ALL my competitor and customer employees by name because I've worked with most of them over a career.

So if I want to sell something, I just contact the right people, arrange a meeting and if my pitch, process and product are good, I'll get the sales. It does require work along the way but once you have it down, it's a lot of "turning the crank" mentally, emotionally and socially.

We're rolling out a new piece of semiconductor manufacturing equipment and that exactly how I closed our first sales.

Of course the product sales cycle is anywhere from 3-18 months because it's heavy capital equipment. Sign-off is generally at a VP or CEO level and an elaborate buying process exists.

Our unit prices range from $30K-$1.5M so this is never going to be something you buy with e-commerce and a credit card. At least not until our installed base is big enough. But that's only companies like TSMC - they still nit and negotiate then so it's still not a "credit card" simple purchase.

The point of all of this is ALL of TSMC's customers are just like ours (TSMC is also one of our customers): every TSMC foundry deal is starting at 6-figures and if you can't play that ante, you'll never be a TSMC customer.

Again they don't have that many customers so most marketing and sales is utterly different from anything seen in consumer markets.

And everyone comes to them because of their brand value which has been top-notch for decades now - they literally have to turn business away.

they're big in industry trade shows. but their clients are hardly readers of hn or tc so really not much use for them to get vanity articles published.

I doubt they do this. Why do they need it? As if somebody doesn't know who the real kingmaker of the industrial world is.

If the world will be left without modern semi manufacturing, it will rm -rf half of the NASDAQ by default.

I feel it's the Silicon Valley itself which needs to acknowledge how insignificant they are in the bigger picture of things.

If I were some big "tech" company head like of Facebook, Amazon, Google, I would've at least gave a look how much the microchip supply chain can trip their companies.

Tan Hock Eng has over the last 5 years bought almost every major network gear chipmaker, and is now holding the entirety of the "cloud" industry under gunpoint for example. The "cloud" guys might be now spending more money on switches than on CPUs.

Now imagine, somebody else will rollup something equally critical.