And yet this has to be repeated time and time again on HN. It is actually quite tiring. People used to look at Intel spending $10B in CapEx and felt the number is unsustainable. ( Part of the reason why Intel lost ), while TSMC is on track to spend ~$50B in 2023.
Perhaps some technologies are just so advanced and difficult, with so many people and specialized knowledge, that firms like TSMC are unbeatable. No one can compete and their global power is assured.
1) If they charge a lot and don't innovate, then there will be a huge reward waiting for whoever invests capital to compete with them.
2) If they are innovative and cheap, then they can fend off competition and nobody cares because they are innovative and cheap.
Except that modern chipmaking is so complicated that even one company can't contain all the specialized knowledge. My understanding is that the Dutch company ASML is the only producer of EUV lithography machines in the world, which the chipmakers depend on to make their most advanced chips.
(And capital intensive). But then again, these words could have been said about wannabe private rocket companies (SpaceX) or squeezing inside car market (Tesla), that actually turned out to be possible. So I wonder if any startup/billionaire will start to serve some niche chip market, be it capital intensive, but with some clever tactics...
Falcon 1 vs currently flying F9 rocket and potential Starship is a huge difference after all.
With TSMC i think we'll see government churning up the market the moment the US expects it to be at risk from China or the like.
until they get disrupted. For example, a wholly new approach to CPU design using lazers and light, instead of silicon, or quantum computing perhaps.
Even if quantum computers can be made to work at scale they'll always remain niche devices for running specialized algorithms. No one is ever going to calculate their income taxes on a quantum computer.
I think that Sophie Wilson said that cost-per-part is rising since we surpassed 22nm, heat is more of a problem because finfet can't dissipate as well as planar, and reliability is declining at smaller nodes. If I needed a 20-year service life, I would not choose 7nm.
Sophie addresses the cost rise at 22:00.
ASML makes the EUV etchers, and carl ziess makes the optical components needed to focus the light... both companies hold exclusive technological monopolies on their respective products.
In addition to this, Samsung and Intel are not that far behind the technology curve for making these chips... with Intel quickly shifting to include the capability of being a global foundry for making chips outside of their own designs.
Historically the landscape in the chip industry changes very quickly. I'm sure your analogy fits some technology in the world, but semiconductors is not it.
And by definition, anything that uses a chip will depend on this, I think? Cars, airplanes, game consoles, mobile phones... Heck, we have chips in pregnancy pee sticks these days.
So, I think all supply chains for "modern" things are insanely complex and effectively incomprehensible.
And this is not new, see the classic "I, Pencil"[0].
> Since only God can make a tree, I insist that only God could make me. Man can no more direct these millions of know-hows to bring me into being than he can put molecules together to create a tree.
I would imagine a smartphone for example having an unimaginably large diagram.
Seriously if you include the box, a phone touches so much of our economy it’s astounding.
It is impossible for the end-consumer, and even a lot of producers to know the provenance of every component in the supply chain. Even if every American consumer is against the destruction of rainforests, connecting the dots to palm oil cultivation and understanding the scale of ubiquity of palm oil in supermarket products is impossible. The only way out of this is government regulations.
Historically, the landscape of the chip industry has had many leading node players.
Now, it has ~1.75. TSMC & Samsung. With Intel and SMIC behind them.
The reduction to those 4 players, coupled with demand from mobile, GPUs, and ML accelerators, is pretty unique since the earliest days of the industry... when pretty obscene profits were also made for a long time (Intel, late 80s to 2000).
I'd call a decade of dominance a pretty stable industry.
I never said this at all.
All I am saying is that the supply chain is complex and that to say TSMC is the sole monopoly holder of semiconductors is very very inaccurate.
This also makes me somewhat sympathetic towards the lack of ip protections in China and other developing economies. Too often the patent system is used to kick away the ladder once one party has gained an advantage.
Semiconductors is as close as we've ever come to a natural monopoly. Aircraft are second. Boeing and Airbus are the only games in town.,
That being said, my main point wasn't to say that ASML has an exclusive monopoly over EUVs and therefore all chips... far from it. I was only illustrating the complexity of the supply chain. Many different entities have monopolies and the landscape constantly shifts.
Just like the short scene spoken by the Bene Gesserit in the 2021 film:
B.G: "..our plans are measured in centuries; we have other prospects if he fails his promise." .. "On Arrakis we have done all we can for you. The path has been laid, let's hope he doesn't squander it."
Or are you saying less power in manufacturing? Like I said, at some point cheap enough is cheap enough.
The lesson from Dune is that even the widest moat can be crossed.
Herbert spent years improving Dune since no one wanted to publish it. He shined it to a perfect diamond.
When Dune was published, it was a good enough success to warrant sequels. Herbert wrote those sequels quickly, and they did not get any polish. They are not diamonds, and no one ought to extract lessons from them.
They're supposedly working on it with Xe-HPG DG2. But knowing Intel and their shenanigans, I'll believe it when I see independent coverage and benchmarks.
We will see how Xe GPU will turn out.
Yet, if history is any guide, then at some point a tech disruption will turn everything on its head and there is no guarantee that the incumbent players survive.
Quantum / optical / bio chips? Nothing on the horizon anywhere close to market, but there is no fundamental reason to think silicon is the end game.