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TSMC, a Company Few Americans Know, is About To Dethrone Intel (bloomberg.com)
For more than 30 years, Intel has dominated chipmaking, producing the most important component in the bulk of the world's computers. That run is now under threat from a company many Americans have never heard of. From a report: Taiwan Semiconductor Manufacturing Co. was created in 1987 to churn out chips for companies that lacked the money to build their own facilities. The approach was famously dismissed at the time by Advanced Micro Devices founder Jerry Sanders. "Real men have fabs," he quipped at a conference, using industry lingo for factories. These days, ridicule has given way to envy as TSMC plants have risen to challenge Intel at the pinnacle of the $400 billion industry. AMD recently chose TSMC to make its most advanced processors, having spun off its own struggling factories years before.
TSMC's threat to Intel reflects a sea change in chipmaking that's seen one company after another hire TSMC to manufacture the chips they design. Hsinchu-based TSMC has scores of customers, including tech giants Apple and Qualcomm, second-tier players like AMD, and minnows such as Ampere Computing. The explosion of components built this way has given TSMC the technical know-how needed to churn out the smallest, most efficient and powerful chips in the highest volumes.
"It's a once-in-a-50-year situation," said Renee James, the former No. 2 at Intel who heads startup Ampere. Her company is less than two years old and yet it's going after Intel's dominant server chip business. That Ampere thinks it can compete is a testament to stumbles by Intel, and TSMC's ability to benefit from those mistakes. It's been a decade since Intel faced major competition and its 90 percent revenue share in computer processing will again deliver record results this year. But some on Wall Street are concerned, and rivals are emboldened, because TSMC has a real chance to replace Intel as the best chipmaker in the business. Last year, the Taiwanese company amassed a bigger market value than its U.S. rival for the first time.
TSMC's threat to Intel reflects a sea change in chipmaking that's seen one company after another hire TSMC to manufacture the chips they design. Hsinchu-based TSMC has scores of customers, including tech giants Apple and Qualcomm, second-tier players like AMD, and minnows such as Ampere Computing. The explosion of components built this way has given TSMC the technical know-how needed to churn out the smallest, most efficient and powerful chips in the highest volumes.
"It's a once-in-a-50-year situation," said Renee James, the former No. 2 at Intel who heads startup Ampere. Her company is less than two years old and yet it's going after Intel's dominant server chip business. That Ampere thinks it can compete is a testament to stumbles by Intel, and TSMC's ability to benefit from those mistakes. It's been a decade since Intel faced major competition and its 90 percent revenue share in computer processing will again deliver record results this year. But some on Wall Street are concerned, and rivals are emboldened, because TSMC has a real chance to replace Intel as the best chipmaker in the business. Last year, the Taiwanese company amassed a bigger market value than its U.S. rival for the first time.
Intel saw how Microsoft got PC builders to beat each other up to carry the One True Operating System, and decided to avoid that racket by building their own parallel brand: Intel Inside (with music) so that CPUs from AMD, etc. didn't push their pricing down. It largely worked, to the point where almost everyone in America knows who Intel is: "it's the guys who powered my Compaq 10 years ago - dun dun dun DAHN".
Last year, the Taiwanese company amassed a bigger market value than its U.S. rival for the first time.
I am afraid the USA is [quickly] becoming an entity of little consequence. It's sad. When we lost manufacturing to China, folks here were ebullient, saying we surrendered cheap labor intensive jobs to China. They were happy that when it came to technology, we are "up there."
From this piece, it now appears that we're not safe. All our president can do is to apply sanctions - which hardly work by the way.
Given that china still owns a significant amount of our debt, we're surely in trouble.
Not so long from now, Russia and China will introduce the C929 . Then our serious remaining industry will be threatened.
Suggestion: Let's stop fomenting chaos in far away lands and concentrate on making the USA a beacon of prosperity once again.
You are correct but you can compare Intel to TSMC plus its customers who are doing their own design work. The article did so.
Historically, the company has squashed rivals using a research budget that dwarfed anything else in the industry. But TSMC’s approach is even undermining this advantage.
While Intel still outguns TSMC in capital spending on new plants and equipment, the tables are turned when you combine the research budgets of TSMC customers like Qualcomm, Apple, Nvidia Corp. and Huawei Technologies Co.
According to Goldman Sachs, the combined budgets of TSMC’s customers are not only larger than Intel but the gap is increasing. By 2020, they will spend almost $20 billion, according to its estimate, at least $4 billion more than Intel.
IMO, the rise to dominance of TSMC's business model is inevitable and probably being driven by the industry's fall off of the Moore's Law curve.
For decades, companies have been able to keep increasing the capabilities of their product by just buying the next-generation general-purpose chip. They got lazy in the process. I'd say this transition occurred in the '87-'97 time frame, a time when the need for engineers to design custom hardware plummeted in favor of buying COTS. But the general purpose approach is starting to fall short of the increases necessary to drive new consumer purchases.
But innovation is still possible. Our laziness has created a deep untapped well of performance growth that can be had by equipping the domains to create domain specific designs. If we can reignite domain-specific engineering, many domains can achieve order of magnitude changes in performance by rolling their own designs.
TSMC is enabling the larger of these domains to achieve purpose-built silicon designed by the domain's engineers for the domain.
The PRC might try to finish off the ROC before we can get a carrier there
Taiwan already has WAY more airpower than a single American carrier, and islands don't sink.
The main purpose of the carrier would be to act as a tripwire, ensuring American involvement if it is attacked.
A sea or airborne invasion of Taiwan is far beyond the current capability of the PLA. It would have to be bigger than D-Day. In June 1944, 90% of the German Army was in Russia. Of their soldiers in France, most were focused on Calais. For the PLA, there would be no "second front" nor any deception about landing points. They don't have even 1% of the amphibious capability that the USA+UK+Canada possessed in 1944.
Airborne invasions have a very poor track record. Crete was a pyrrhic victory, the Normandy jumps were successful only because they linked up with troops advancing from the beaches. Arnheim was a failure. So was Dien Bien Phu.
China could go nuclear, but that would likely bring American retaliation. If Taiwan ever feels like they can't count on America, they could build their own nukes in, maybe, a month. Remember, every country that has ever made a serious attempt to build a nuke has succeeded on the first try. As one of the most technologically advanced countr^H^H^H^H^Hregions in the world, Taiwan would have no problem.