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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 Designs and makes their own chips. TSMC just takes your designs and makes the chips. Which is a perfectly fine business model, but comparing Intel to them isn't really the same. As Intel puts a lot more R&D in designing the chips then making them.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
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.
if your chip designs are that sensitive for national security you better have your own Fab.
ROC is a solid America ally, so there isn't much "national security" risk. American defense contractors can't afford their own fabs.
Now the part that can be fixed with trade negotiations is to be sure that the company doesn't go ahead and make a spinoff product based off your IP.
ROC does not require any IP sharing or joint ventures (ROC != PRC). If they are fabbing your chip, you give them your masks, not your VHDL/Verilog source. With the mask, they could make direct copies, but not "spin-offs".
Of course, if they are caught ripping off their customers, their $190B market cap would quickly go to near zero. So they have a pretty big incentive to behave.
Intel does R&D, producing new designs. TSMC just makes stuff others design, and therefore has a much higher chance of making stuff with security holes (and doesn't care because security isn't their job).
I don't get what this article is trying to say. TSMC is about to dethrone Intel ... how?
In value? TSMC's market cap is half that of Intel.
In innovation? TSMC is a manufacturer of outsourced chip designs ... think a Chinese factory that produces car parts for Ford. The article references the combined research budgets of Qualcomm, Apple, Nvidia and Huawei. That's cute, but what does it have to do with anything? In real life, those budgets don't actually "combine." They're all competing against each other. Does the outsourced manufacturer benefit from having all these customers? Sure, but so what?
Intel, meanwhile, designs its own chips, which still dominate the PC and server industries. It also makes chipsets to go along with these, and most processor customers use these integrated chipsets these days. Add to that wireless devices, compilers, SDKs, and all the other stuff it produces that comprise an entire ecosystem.
Does Intel face challenges? Sure. I don't think anybody can argue that it's kinda fallen on its face in the mobile market. But does anyone see AWS or Boeing approaching TSMC to produce custom CPUs tailored for specific workloads?
So in that sense, you might as well say TSMC is about to dethrone IBM. It just doesn't make any sense to me.
Breakfast served all day!
There is no historical evidence of the creative aggression of women on any level that has meaning in the large. Every device and entity that they occupy was created and pushed forward by men.
You write this on a comment thread about the fab AMD is using? AMD, the company headed by Dr. Lisa Su? The company that's going to cause Intel to lose a double digit market share percentage in 2019? For the second time in the company's history? That AMD?
She joined the company in 2012, became CEO in 2014, and is widely credited with driving the company to commit to and complete the Zen architecture. She took over from Rory Read, a business wonk who did businessy things... and drove AMD into the ground in the process by failing to invest in new development. She's a match for Dirk Meyer, the CEO prior to Rory Read who gave AMD their first big lead over Intel with the Athlon family.
It may be that men have created more things this way than women, but it's not "creative aggression" so much as it is risk-taking. Men take more risks than women. They have to, to reproduce it nothing else. Many of them fail in their aggression. Enough succeed that stuff gets made. But across the spectrum of risk-takers, there are women right up there at the high end of the spectrum, right along with the men. Dr. Su is one of them. So no, not "every device and entity".
The "T" in "TSMC" stands for "Taiwan." We might worry that TSMC might share IP with the government of the Republic of China, for whatever good that would do anybody, but the odds of them knowingly sharing IP with mainland China (the PRC) is substantially zero. Not only for ideological reasons, but also because the PRC has SMIC and other TSMC foundry competitors. TSMC has a substantial lead over them at the moment, and would like to keep it that way.
That Ampere thinks it can compete is a testament to stumbles by Intel, and TSMC's ability to benefit from those mistakes.
Maybe. But from personal experience, I can also say that they might just be stupid. I work in IT for a Fortune 500 company. I never name them here. We do a lot of software as a service type things. We're pretty good at what we do and in some areas we are likely the top dog for US based solutions. The business segment I support isn't sexy at all. But every year we have to deal with multiple startups who try to take our business. Many fail. We often see new companies say they can do everything we do for half the cost. Half the cost? Sure. But in reality they do like 1/3 instead of everything we do. So we have customers who leave over cost and then come back because our competitors really suck. Again, this is just not a sexy business segment in what I work with. This isn't it, but imagine you work for Turbo Tax. You don't just have H&R Block, Tax Slayer, etc. to deal with but every year some punk upstart company says it can do taxes better for way less than you charge. How much better can it really be? Either tax software works or it doesn't. You can't really make it "better". But we still have competitors who claim that this somewhat stagnant business can be done better and cheaper. And every year we watch as they go out of business.
Another problem I've seen with startups is the "We can't possibly fail because we're geniuses!" attitude. Most startups do fail. I know a guy who has spent most of his IT career chasing startup glory and failing. He does make really good money, but he's always having to find a new job with the next startup. The older product I still support was started by a successful startup that my current employer bought out. I can tell you that a large number of people associated with that startup left us within a year or two of the acquisition going through and they went to a few different new startups that various people associated with the original company started. All those startups failed. And a large number of those people returned to my employer, tail between their legs. So sure, maybe what is said about Ampere is true and will happen, but I'm not ruling out that it's a dumb idea and they'll fail at it.
Each company seems to be measuring a different thing when they report a process is "x nm." So while you can compare nm within a single company's offerings, you can't compare them between different fab companies. TSMC and Samsung's 7nm processes leapfrogged Intel's 14nm process (37.5 million transistors per mm^2). But they're still behind Intel's 10nm process.
Only a very tiny part of ARM offerings has that stuff, and it seems they licensed most of it just to produce high end designs for specific customers.
I have dozens of ARM processors within 10' of me, across multiple families, and none of them have out-of-order speculative blah-blah, they're all pretty standard RISC chips. The deepest pipeline is 4 stages, in-order.
It's about a trillion out of 15.6 trillion. We owe most of the debt to ourselves. Meanwhile what we own to other countries can largely be thought of as tribute. Folks don't seem to realize that with a big military comes an empire, and America has an empire like any other nation with a big army. You don't need 19 aircraft carriers to defend yourself against Canada & Mexico...
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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.
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.
Why would China care about occupying Taiwan? They could simply bomb it out of existence without risking their troops. There are no defense systems that could prevent the military annihilation of Taiwan, and the US military also cannot do anything to prevent this.
However, there are three things that currently protect the military status of Taiwan:
First, Taiwan doesn't have anything that China doesn't already have much more of. Perhaps China doesn't have a TSMC, but a Chinese takeover of TSMC would kill the company as no client company in their right mind would hand over important IP to a Chinese-controlled fab.
Second, China has already effectively taken over Taiwan in many ways. Taiwan is economically dependent on Taiwan. Taiwan's official international relations and sovereign pride have effectively been destroyed. Most nations already recognize a Chinese takeover of Taiwan, at least nominally. China already exerts influence over Taiwanese elections directly through the 1 million Taiwanese businessmen who live in China and care less about Taiwanese sovereignty than their pocketbooks. Furthermore, the folks who remain in Taiwan realize that the Taiwanese economy will only continue to be more and more dependent on Chinese business ties.
Third, straight from 1984, Taiwan as a purported renegade traitor, an eternal enemy to hate more than the in-power totalitarian regime, is of infinitely more value to the PRC than as a station for military troops.