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Comment by gjsman-1000 | Hacker News Reader

From a (slightly) insider perspective, companies that want the latest node actually pay billions of dollars yearly to TSMC for both factory construction and research, not just production capacity. Thus, in a few years anyone will be able to buy similar production capacity for the same cost, but Apple is bearing massive upfront costs others will not need to pay, for the privilege of being first. I'd call that a benefit for everyone, not anti-competitive. TSMC claims that without this investment, new nodes would be far less frequently deployed, so somebody has to be willing to pay the upfront to help them out.

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This. Apple massively subsidizes these chips on the research, development, and construction end. Without Apple TSMC wouldn't exist.

I wouldn't go so far as to say that TSMC wouldn't exist without Apple. TSMC was and continues to be the preferred manufacturer for many other fabless design companies, like Nvidia, AMD, and MediaTek.

Nvidia used Samsung before

AMD used global foundries

Idk about mediatek, could be

What started the TSMC “boom” was apple

TSMC probably got big when Apple started using them for everything. Historically, Nvidia has used TSMC for most Geforce cards (sometimes using another foundry like Samsung), and even the earlier TNT2[0] from 1999. AMD bought ATI, which has been using TSMC for some Radeon chips going back 15[1] if not 20[2] years.

[0] https://www.techspot.com/article/653-history-of-the-gpu-part... "The TNT2 utilized TSMC's 250nm process and managed to deliver the performance Nvidia had hoped for with the original TNT."

[1] https://www.cadence.com/en_US/home/company/newsroom/press-re...

[2] https://www.techspot.com/article/657-history-of-the-gpu-part...

If you look at TSMC's revenue this doesn't seem to be the case: https://companiesmarketcap.com/tsmc/revenue/

Ignoring the 2014 outlier (2013 was the year Apple started using TSMC) the growth curve looks pretty uniform for the last two decades.

Why would you ignore the 2014 number? Isn't that exactly the cash infusion that Apple did to help TSMC become the leading semiconductor manufacturer? They make 20B in 2013, and then a year later suddenly make additional 60B on top of that? 60B can fund a lot of R&D.

Actually that outlier simply was a wrong number it seems, as per [1].

But my reasoning was:

* Most importantly, TSMC's market share grew uniformly, and they already were quite dominant before (market shares: 2013: 49%, 2014: 54%, 2015: 55%, from [1])

* I don't know whether that additional revenue is from Apple. Apple's use of TSMC has to have started in 2013 if they shipped the products in 2014, and to my knowledge didn't end in 2014.

* If Apple could use a node size in 2014, actual development of that has to have started quite a few years before.

[1] https://investor.tsmc.com/english/annual-reports

> Actually that outlier simply was a wrong number it seems, as per [1].

Oh, I see. Makes much more sense than getting $60B out of the blue :)

>Without Apple TSMC wouldn't exist.

Really, the biggest semiconductor manufacturer in the world with tons of customers cannot exist without Apple ?

without Apple, TSMC would likely not have been able to finance lead it currently has.

TSMC would exist without apple, it just would be way less relevant

TSMC started becoming relevant because apple switched from Samsung to TSMC way back in in the second iPhone if I am not mistaken

They started getting a lot of cash and investing it back in RnD, and with time got to where they are now, leading the industry by far with only Samsung capable of providing somewhat competing technology but with much smaller market share

I think that's total conjecture, they were very competitive long before they started catering to $PHONECO: https://www.tsmc.com/english/dedicatedFoundry/technology/log...

Competitive but not the leader in logic. And don't forget that TSMC's advances have helped AMD to complete with Intel.

iPhone 6 was the first with soc made at TSMC. iPhone 4 was the first with apple designed soc, but still made at Samsung.

That's a good point. However from a consumer and enthusiast perspective I would like all competitors to be able to compete on level playing field to see which one gets the most out of the technology.

What would allow them to get the most out of some technology if the playing field is level?

What's the difference between having an agreement with a factory and having a better employee?

Then it's not a free market anymore. And I say that being a very leftist person, what you wish isn't compatible with capitalism as it is.

Apple isn't doing this to be altruistic. They see a huge business advantage. Look at the hype on HN the M1/M2 MacBooks have.

They don't have to be altruistic. Without Apple's investment or similar, TSMC is very clear they would deploy new nodes far less frequently, simply because they could not otherwise afford it.

Apple doesn't need to be altruistic for something to be good for the industry as a whole. Also the M1/M2 hype is well deserved. Sure they aren't gaming computers but pulling off the transition with zero issues for normal people and relatively minor issues for developers (mac, web, any type) is impressive, especially with the battery life and how cool these run.

This is the miracle of capitalism and markets; we harness the greed of people and groups of people for the forward movement of society.

*consumer technology

I wouldn't say it always propels society forward. It pushes and pulls and eventually some forward momentum grows but the forward movement comes much more from basic research and eventual applications of it. Most basic research wouldn't survive with pure market capitalism at all.

That would be true if other competing offers weren't getting turned away. Nvidia dumped 9 billion dollars into TSMC last year just to get a fools ransom of 5nm wafers. They don't even get the option to buy 3nm, so it's not about 'continued investment' or anything. TSMC is simply optimizing for their most lucrative customer, the failure is not with them but rather capitalism failing to incentivize fair treatment of all their customers. I don't think TSMC or Apple is to blame here, but the displacement of the semiconductor industry has been pretty disastrous over the past 3 years. It needs to stop, and it starts by breaking up nonsense exclusivity deals like this one.

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