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TSMC “Apple-first” 3nm policy leads to AMD and Qualcomm mutiny (club386.com)
320 points by DeathArrow 6 days ago | hide | past | favorite | 355 comments





Apple has a long history of buying their suppliers a production line in return for guaranteed production levels, going back to the start of the Tim Cook era.

An early example.

https://www.apple.com/newsroom/2005/11/21Apple-Announces-Lon...

A more recent example.

https://www.reuters.com/article/us-apple-corning/apple-award...

If you go back to the time when Apple was looking at single sourcing all their SOC production at TSMC, you'll see TSMC's CEO publicly saying it would make sense to dedicate a Fab to a single customer.

>The world's leading foundry chip maker Taiwan Semiconductor Manufacturing Co. Ltd. is considering operating single-customer wafer fabs, according to chairman and CEO Morris Chang.

"I think that they are going to be larger customers, and now it makes complete sense to dedicate a whole fab to just one customer and hold that – to hold fabs in fact to just one customer."

https://web.archive.org/web/20120728040723/https://www.eetim...

I think the reason that Apple is always first in line at TSMC is that they bought TSMC a Fab.


They don't have to buy TSMC a fab, they simply have to pay (slightly) more than other TSMC customers - and Apple with its uniquely high margins can afford to do just that. Of course, depending on other details of the contract (such as guaranteeing certain volumes, which Apple can also do much more easily because they use the chips themselves), they don't even have to pay more to be TSMC's preferred customer.

Actually I would put the blame squarely on AMD and Qualcomm for making themselves dependent on TSMC - especially AMD who have turned themselves into a "fabless manufacturer" and are now experiencing the consequences...


> they simply have to pay (slightly) more than other TSMC customers

I'd argue that they need to pay significantly more than other customer in order to get such preferential treatment.

In a short-sighted view of things, you only need to pay slightly more. If AMD is willing to pay $1 and Apple is willing to pay $1.01, you make more profit selling to Apple. However, as this article shows, you might end up losing the other business if you offer Apple such preferential treatment. If Apple isn't going to use all of your capacity year-round, you don't want to alienate the other companies whose orders you rely on.

I think Apple likely has to pay a significant premium for getting access to the latest and greatest to the detriment of competitors. It's not in TSMC's interests to become too dependent on Apple. If AMD and Qualcomm mutiny and their orders start boosting Samsung's foundries with more money for R&D, TSMC could find itself 1) competing against a better-funded Samsung foundry; 2) with one customer that now has leverage over TSMC and getting paid less.

If AMD and Qualcomm move all their orders to Samsung, it provides Samsung with the money to reinvest in its chip business. If they're able to make long-term commitments to Samsung, that's bad for TSMC since it will allow Samsung to invest knowing it will make a profit (just as TSMC has been able to do that with Apple's commitments).

Likewise, if the two other giant chip design companies move to Samsung exclusively, that leaves TSMC in a tough negotiating position with Apple. Before, Apple would have to compete against AMD and Qualcomm for capacity. Now if AMD and Qualcomm have made long-term commitments to Samsung, TSMC becomes really reliant on Apple and Apple will know that TSMC has capacity they can't sell elsewhere. Sure, MediaTek and others exist, but it swings the power away from TSMC and toward Apple. Let's say that Apple was using 40% of TSMC's capacity, AMD 25%, Qualcomm 25%, and MediaTek 10%. Now AMD and Qualcomm make long-term commitments to Samsung. Apple knows that TSMC's orders have dropped 50% and that gives Apple a lot of power.

Giving Apple the best to the detriment of AMD, Qualcomm, and others is a risky play for TSMC. They'll definitely want to be getting very well compensated for it, not merely slightly more. They'll want to make sure that what Apple is offering is enough to offset the substantial risk of angering competing chip design companies who might look for fabs elsewhere.


Apple is 20% of TSMCs revenue. That’s enough to make such demands. On top of that they’re likely also paying top dollar.

Risking the future of your business for a 20% customer sounds like a tricky proposition, and moves like this have real risk for TSMC.

It's hard to predict the future; and the whole point of a foundry and why TSMC has been so successful is because they refused to play that game. They kept their options open and flexible rather than betting on a few key chips, and they've repeatedly pointed out how the very diversity of their customers has meant they always have some customer willing to be a guinea pig for some new tech.

Losing diversity is a cost; it undermines their very business model. From a business perspective you'd hope they really made apple pay through the nose for that cost, and not just acquiesce because they're a significant customer.

I'd say it's at least plausible that TSMC miscalculated here, and didn't think AMD and Qualcomm (and perhaps others) would dare.

To be clear: they might still get lucky (and AMD/Qualcomm unlucky) - it's not exactly news that new process nodes sometimes fail or are delayed, and if Samsung turns out not to be able to deliver, they'll be able to reacquire that diversity with little trouble, surely. And if they can replace AMD/Qualcomm with other leading edge customers they might not even really be losing much of that diversity they value so highly.


Apple is also the biggest customer for Samsung, outside of Samsung themselves. And they have preferential contracts with Samsung, too. Enough that Apple has required the Samsung chip manufacturing subsidiary to operate with Chinese Walls between them and the other Samsung businesses, and sometimes Apple gets preferential treatment over those other Samsung businesses.

So, this is a frying pan versus fire situation. I don’t think AMD and Qualcomm are doing themselves any favors here.


Do you have any link or data to back that up? Obviously, Samsung isn't entirely open about who's paying it how much...

Another large customer (that will be jumping ship to TSMC) is Nvidia, and clearly Samsung isn't supplying any of apples core SOC's anymore, so what is Samsung providing to apple that's valuable enough to make apple it's largest customer?


Apple is not known for overpaying. Apple is however a significant volume customer and volume customers usually enjoy a huge discount that smaller customers don't get. So in addition to preferential allotment, Apple is probably paying less for the same node.

Apple may not overpay, but if they're willing to pre-pay multiple billions of dollars that's a huge incentive for a company like TSMC, who gain the ability to instantly (well, "instantly") launch capital projects, rather than having to wait for three years of revenue to roll in first.

For all we know, TSMC is taking all that 3nm Apple money and putting it into producing new 3nm fab lines, which would honestly be better for everyone in the long term (except Intel, I suppose).


Sure, Apple's prepay financial arrangement might have some outsized influence in smaller, riskier, or declining businesses, such as GTAT or JDI, but there is nothing special about pre-pay, especially in this market and this particular industry. Top fabless makers from Qualcomm, to nVidia, to AMD, to TSMC are flushed with money and are desperately competing for capacity. In fact, TSMC recently disclosed that they received over $3.8B in such prepay, or "temporary receipt" from various customers for their future nodes [1].

Further, Samsung and TSMC routinely spend many more billions on capex every year. Both companies not only have many billions stashed away, but also have the means to finance them without relying on Apple. For instance, Samsung's capex in 2020 was nearly $30B; TSMC ~$25B, vs Apple's $7B.

Sure, Apple is a big consumer of the latest nodes, but the process nodes will advance with or without Apple or Apple's money.

[1] https://www.tomshardware.com/news/tsmc-collects-huge-prepaym...


Not sure I totally buy your point, but it does sound interesting/intriguing enough for an Asianometry video: https://www.youtube.com/c/Asianometry/videos

Arguably becoming fabless and manufacturing at TSMC is what brought AMD its edge over Intel and its recent success.

The reason AMD went fabless had nothing to do with edge. It was a move to prevent bankruptcy. Intel fell behind because of its process woes and managerial issues. They weren't outworked, they played themselves.

Only half the story. AMD also needed to do that due to antitrust shenanigans that harmed AMD. In my recollection of history, this was litigated in court and (I think?) eventually settled before a verdict.

https://en.wikipedia.org/wiki/Advanced_Micro_Devices#Litigat...

"n 2005, following an investigation, the Japan Federal Trade Commission found Intel guilty of a number of violations. On June 27, 2005, AMD won an antitrust suit against Intel in Japan, and on the same day, AMD filed a broad antitrust complaint against Intel in the U.S. Federal District Court in Delaware. The complaint alleges systematic use of secret rebates, special discounts, threats, and other means used by Intel to lock AMD processors out of the global market. Since the start of this action, the court has issued subpoenas to major computer manufacturers including Acer, Dell, Lenovo, HP and Toshiba.

In November 2009, Intel agreed to pay AMD $1.25bn and renew a five-year patent cross-licensing agreement as part of a deal to settle all outstanding legal disputes between them."

Unfortunately by that point the damage had been done. Fabs are an extremely expensive, normally lower margin, business. Risk averse companies probably can't get into that game. Even with Apple they appear to have focused on something of a partnership with TSMC rather than their own fab.


Yeah this one is hard to look at, especially because for a while it looked like it was a very bad move for AMD. In retrospect it was still a kinda bad contract for them for a while (IIRC, GloFo couldn't deliver on process for Bulldozer, which led to poor yields/heat/etc, killing demand, but AMD had contracts with GloFo stipulating penalties for not hitting certain order numbers.)

But at the same time, they were then unshackled as you said; As time went on and they could move more volume to TSMC it wound up helping them out immensely.

It's kinda worth remembering too though, that even at their 'peak' in the early 2000s AMD was 6-12 months behind Intel on process tech if you go by releases. Given the trouble Intel has had keeping up one could only imagine where AMD would be now.


I don't think there's any debate. GloFo abandoned 7nm research 3 years after TSMC shipped. TSMC has since pushed out 6nm and 5nm while GloFo is just languishing in 12/14nm.

GloFlo is still doing some pretty cutting edge stuff for specialized processes. There is more to semi-conductors than just the highest density.

They’re not languishing, they just stopped trying.

It was a difficult seat to be in and they managed to use what they had extremely well. Let's see how they fare now.

> They don't have to buy TSMC a fab

They don't have to, but buying production equipment for their manufacturing partners (in return for guaranteed pricing and production levels) is the norm at Tim Cook's Apple.


Is the norm for Tim Cook's Operation ( both before and after Steve Jobs ) at Foxconn. Or more specifically industrial design and manufacturing.

Apple dont buy production equipment for TSMC, or Samsung Foundry. Zero.


We can’t know for sure, but it’s highly likely they provided heavy capital investmeny to TSMC, and you can bet that came with strings attached.

To add to the other examples given here, Apple actually owned the manufacturing equipment for the first generation retina panels, even though it was housed in factories owned and operated by Sharp.


They did for the glass manufacturer who built the large panels for the Apple Flagship Store in NYC. They also invested in Corning for building the glass for the iPhone (Tech that Corning shelved for decades).

They also did it for the company in Arizona they hoped would produce sapphire boules for iPhone screens.

And another company that laser bored small holes in the unibody aluminum cases for LEDs to shine through.

Maybe not literally, but effectively. If Apple's willing to place a cast-iron multi-year order worth tens of billions of dollars with TSMC, the latter is going to go out and build more fabs. Any bank would lend them the money to do so on that basis.

Undoubtably that's why Apple gets such preferential treatment from TSMC and other suppliers.


> Any bank would lend them the money to do so on that basis.

There is a good chance Apple lent TSMC the money - although the actual transaction would probably not simply be lend at x%, but be designed to be taxation efficient for both parties which might involve other parties or securities.


> Actually I would put the blame squarely on AMD and Qualcomm for making themselves dependent on TSMC - especially AMD who have turned themselves into a "fabless manufacturer" and are now experiencing the consequences...

The consequences being if you don't like what your fab is up to, you can switch fabs. Doesn't sound too bad. GlobalFoundries, the former AMD fab, has all but given up on smaller nodes at this point, but AMD switched to TSMC for CPUs and a mix of TSMC and Samsung for GPUs. On the other hand, Intel had problems with their fab for several years, and is only now starting to consider using other fabs, when their process seems to be starting to work.

Yes, designing chips to fabricate on different lines is more work, but it's something AMD has intentionally done and it has benefits over running your own fab, especially when your own fab has trouble with node shrinks.


Eh, the business world isn't as simple as Econ 101. Personal and business relationships matter. Risk matters quite a bit too. Which is why strategic partnerships happen between large businesses.

> They don't have to buy TSMC a fab, they simply have to pay (slightly) more than other TSMC customers - and Apple with its uniquely high margins can afford to do just that.

It's not as simple as high margins but controlling most of the stack. If all Apple was doing was charging more, we'd see comparable quality devices at lower cost but we don't and it's not uncommon for e.g. a Samsung flagship to cost more despite being slower (or narrowly beating the previous generation, depending on launch timing). What we're seeing instead is that Apple has both consistent goals on their execution (e.g. not Google and Qualcomm working at cross-purposes which make sense for their individual businesses) and captures more of the revenue.

That's a lot harder to catch up with and gives Apple consistent enough revenue that they can do things like effectively floating TSMC a great loan or pay more per unit since they don't need to justify it based on the profits from a single layer. Dell can't pay for their processor R&D using the money you spend on Spotify or Steam.


Indeed, this is the obvious risk of allowing a TSMC monopoly, and its "fabless" customers have little justification for complaining.

AMD is not the savior here, nor any other TSMC customer. Intel completely squandered its lead, and now we really need to hope they can catch up and remain competitive. We shouldn't allow TSMC to take total control of the market.


I don't think they would only need to pay slightly more. It is a bad move to be entirely dependent on a single customer to the detriment of your other customer relations. To gain exclusivity there would likely need to be a significant premium paid and minimum order commitments.

They're not though. There are still many fabs available, just not the premium ones. It's up to every other company that wants those seats to pony up and do what they need to do to get that capacity.

It's like a restaurant reservation for a very regular "VIP" customer. They may get really special treatment, because they're probably spent enough to earn it. And everyone else schleps in line.

Really there's nothing wrong with that. It may be annoying, but someone is paying way more and consistently for that table.


I think that restaurant analogy is pretty bad. Driving customers to a competitor is a risk you take when locking them out of your restaurant, and those customers could also be lucrative VIP customers as well, not just schleps from the street. If that mega VIP ever stops coming to your restaurant, and you've lost your other VIP/customer base, you'll be hurting big time. This can lead to leverage the mega VIP has over you, as they know you've overcommited to them, and can tighten the screws.

Yet this is what practically all non fast-food restaurants do. And kind of how general strategy goes for many businesses.

I know the few places I frequent often, I get a table mostly right away if anything is available, regular staff knows what I want, more or less, and I get what I expect, mostly because I have a relationship with the vendor.

I tip well. Chat everyone up, etc.

You don't think Apple or TSMC does this?

I've been in that type of relationship in that industry. That's really how it kind of works. It's not even the most $$$$, but relationship and longer term leverage.


Do you reserve the restaurant exclusively for yourself? No. So this scenario is not really similar at all to skipping the line at a restaurant just because you visit often and tip well(which means you are paying a premium here). It's turning away the entire line for a single patron. The restaurant better make sure that's in their best long-term interest before pissing off the other patrons. Also the number of patrons willing to shell out for leading-edge lithography is probably in the single digits. TSMC can't rely on foot traffic to pick up for lost business elsewhere.

Hopefully that VIP customer do not slip up. If it does, you are going to have a bad time.

They don't have to buy TSMC a fab, they simply have to pay (slightly) more than other TSMC customers

They don’t even have to do that. They just have to place orders that are sufficiently larger than any of TSMC’s other customers’.


> They don't have to buy TSMC a fab, they simply have to pay (slightly) more than other TSMC customers

Also large minimum orders, and probably a bunch of the payment upfront or somesuch.


AMD would be dead if they had not done that.

I agree. ALl AMD / Qualcomm have to do is guarantee a sufficiently sized order, and that's equivalent to the "Apple buys a production line".

And uh yeah: AMD and Qualcomm do have the order sizes to do that.


Can Tsmc has 2 fab …Or amd and Qualcomm is free rider

AMD has a real issue in that there feature set is 2+ Years behind Intel. They are counting on access to better process to remain competitive.

I've always found the story of the webcam indicator shining through metal to be fascinating.

On MacBook laptops from ~2011, a green light would indicate when the webcam was in use. But the magical part of this was that when it was off, you couldn't see the LED at all, so it looked like this light was shining through the metal bezel at the top. This was achieved by drilling extremely small holes in the frame above the LED, small enough that they're barely visible without magnification but having enough of them that light can easily pass through. It's a striking effect, if you notice it.

To do this, they apparently bought so many high-precision lasers just for this feature that it created a shortage for other companies that needed them: https://www.bloomberg.com/news/articles/2011-11-03/apples-su...


Googling isn't finding the story, so take this with a grain of salt, but as I recall there have been incidents where Apple needed so many of a specific machine, made by one specific company, to set up their manufacturing, but when they couldn't get enough delivered on time they bought the company outright.

(Presumably this would help by giving them access to the IP so they could contract other factories to manufacture them as well, since Apple has the up-front cash to do it)

Again, I can't find the article so who knows if it's true, but it sounds very, very Apple to do that.


A bit dated now, but still a good analysis by Horace Dediu on Apple’s machinery expenditure here:

http://www.asymco.com/2011/10/16/how-much-do-apples-factorie...


There was also a small glass/saphire company that agreed to sell exclusively to Apple, they had to innvest a lot of money to increase capacity, and in the end, Apple decided to continue using Gorilla glass, and the company went under.

The CEO was charged with fraud afterwards and they undoubtedly had some contract with Apple committing to it. It would seem that the supplier lied about their capabilities.

https://www.engadget.com/2019-05-06-apple-sapphire-glass-sup...


That sounds very familiar. I think they might’ve done it to source the milling machines used when they switched to the unibody MacBook pros?

I recall they used the laser holes for the power light in the front of those MacBooks. The led ‘breathes’ (fading in and out) when the computer is ‘asleep’

Yes, and it is gorgeous. I still have my 2012 MacBook Pro with this light in the front. I've upgraded to the M1 MBP, but the 2012 model still runs beautifully almost ten years later.

There was also a meme about Apple buying 10K CNC machines for unibody manufacturing. Probably exaggerated by one order of magnitude, but still substantial.

What Apple did for Japan Display is interesting. They invest to build new JDI Hakusan factory for iPhone LCD but they were going to transitioned to OLED as a result. Then the factory become debt. https://www.strategyanalytics.com/strategy-analytics/blogs/c...

Its actually going back to at least Jobs return to Apple in 1997. Apple financed Wifi card production line for their modem supplier in Taiwan:

https://www.youtube.com/watch?v=Tj5NNxVwNwQ Arthur W. Astrin, sort of father of WiFi, hired by Apple to develop and incorporate 802.11b into their products. Spend most of 1998/99 flying West Coast-Taiwan twice a week (coordinating iBooks/iMacs manufacturing).

Made HP very happy:

>so I called up HP and I said "I need a spectrum analyzer. It needs to be at least three gigahertz,", and it would be nice if it was programmable. So, they whipped up something and next day the salesman shows up with this.. they call it HP Basic Language Computer. So we built 1, 2, then we ordered 10 then 50. All of a sudden HP started coming. The salesman became my best friend. <Laughs> In fact, I think I was the largest order that year for the spectrum analyzer at HP

We are talking small car unit prices here.

Afaik they did the same for iPhone camera modules with Primax, who went from small time accessories and gadgets manufacturer to one of Taiwan titans.


It goes back to the iPod days.

Apple used to buy up the flash memory in advance. Leaving competitors to pay more for smaller yield or inferior quality.

It doesn't always work. Apple once invested a huge amount in making sapphire glass for their watches. I can't remember the company name but they failed completely at delivering to Apples required spec and the deal was scrapped (leaving the supplier to face massive debts).


GT Advanced Technologies (https://www.sec.gov/news/press-release/2019-66 SEC went after them in 2019)

I had a chat with an engineer that was building apple stores (the big anchor ones). The stone for the walls came from a quarry that was fully bought by apple, apple people would go there to select the stones that had the quality they wanted and use those.

Yes, it is capitalism at work. Whomever pays more, decides.

Apple says something along the lines of “we guarantee to buy x million chips this year, y million next year. We know it’s expensive to build that capacity, so here’s a few billion up front”.

That’s an offer few can make and nobody else is willing to make.


The big point indeed is, that Apple pays in advance to finance the buildup of the production facilities. Of course they get the first access at the output as a consequence.

That’s reasonable, I guess. If that is “capitalism” (with negative connotation) then what is more fair alternative to this?

Samsung’s foundry, obviously. Choosing Apple meant letting go of old guard players

Qualcomm and AMD could have chosen to be more vigorous in their competition. Android customers would have gotten better phones, Intel wouldn’t have waited until 2021 to start making decent parts again, and everyone would win.

Maybe a more fair version would be for the federal government to socialize each of these players, and decide that they will pay a premium for slow, hot, American-made parts.

If that sounds ridiculous, meditate on why you think capitalism/markets have a negative connotation when they are in fact producing great outcomes - amazing chips (M1 series) and competitive pressure on Intel, AMD, and Qualcomm to eventually deliver similarly competitive chips.

Unbridled capitalism gets a bad rap, but that’s a relatively new innovation. You can have a well-regulated market produce even more fabulous outcomes; don’t blame corporations for those outcomes, blame politicians and the voting public.

Edit: a theme I see repeated over and over, on hacker news of all places, is people making excuses for businesses operating in competitive markets. Making excuses is bad for consumers, it’s bad for competition, it’s bad for society. Stop making excuses and ask business to work harder. Android users deserve fast processors, and it is 100% Qualcomm’s fault that they don’t have them. Intel PC users deserve fast, low-power processors, and it is 100% Intel’s fault that users don’t get them, or have to go to AMD/Apple for them. Apple’s success is proof positive that AMD, Qualcomm, and Intel have been insufficiently vigorous and innovative in their competition, which in manufacturing products also involves the surrounding business practices needed to ensure access to fab capacity.


Upvoted, but:

>> You can have a well-regulated market produce even more fabulous outcomes...

Can you cite an example of this?


Does that not qualify as a monopoly? No other company in the world has the amount of liquid cash Apple does, so if there really are informal arrangements like this I'd expect them to be heartily scrutinized at their next antitrust hearing.

Why would it?

At a much smaller scale, I have had contracts with various vendors to provide “stuff” associated with services they provide to us.

In one case, they had a facility dedicated to my company’s needs, with tooling maintained by my company. The contractor has an SLA to achieve different levels of operational readiness.

What Apple is doing is no different, except they are buying 8-9 figure tools or loaning lots of cash at favorable terms.

I certainly wouldn’t shed many years for Qualcomm, which has an actual monopoly on modems. Their lack of strategic competence isn’t Apple’s sin.


> No other company in the world has the amount of liquid cash Apple does

I'm not sure that's true these days, but, even if it is true, plenty of other companies could _raise_ it easily enough. It might make less sense for other companies, though. Like, realistically, if AMD is beating Intel already (and, for the moment, they largely are; Alder Lake is niche for now), what does being a little earlier with 3nm buy them? Is it worth the money? Perhaps not.

It's even less clear that it would be worth it for Qualcomm. For them, it's hard to see that there'd be any return; they have a captive audience already.


> even if it is true, plenty of other companies could _raise_ it easily enough

How many companies can easily raise $200 billion?

https://www.cnbc.com/2021/01/27/apple-q1-cash-hoard-heres-ho...


"plenty of other companies could _raise_ it easily enough"

This extraordinary claim that it's easy to raise 200BN is backed up by no argument or evidence?

The claim that it's more worthwhile for Apple than it is for a CPU company to have CPU production exclusivity is backed up by no argument, logic or evidence?

What can be asserted without evidence can be dismissed without evidence.


They aren't buying up all of the infrastructure. Samsung and Intel offer the same services. It's not a monopoly for a company to pre-order ahead of time. It's like Kickstarter but at a grander level.

They aren’t preventing anyone else from becoming wealthy enough. If others wanted to do this they could use their own cash supplies (https://www.valuewalk.com/2019/11/top-10-companies-with-larg... ) or take out loans.

Technically, that's not a monopoly but rather a monopsony—a market dominated by a large buyer.

Getting an advantage by having more money than everybody else isn't a monopoly. That's just the garden-variety unfairness of capitalism.

Using lots of money to buy up all supply isn't just "garden-variety capitalism". Buying all available supply is a way to become a monopoly. You got there by having lots of money, but after you get there you are the monopoly.

Although most would argue that lower end architectures are perfectly fine replacements, so Apple gets an edge here but can't be said to be a monopoly.


It's probably market manipulation, rather than monopoly.

Buying all supply is usually called "monopolizing".

Thats true in popular disource, but there are like 20 different forms of unfair competition, ranging from collusion to dumping.

I don't have the nessesary background to know which one is applicable, but I think monopoly is not the right one.


Informal? It’s not informal. It’s part of the contract. What exactly is the monopoly/antitrust violation you are seeing?

Would that move make TSMC's CEO less like a CEO of an independant company and more like Apple's VP of chips?

This is really nothing new. Apple has been playing this game for years, ask anyone who shared an adjacent floor with Apple in Foxconn in the last decade.

Whether it's unibody aluminum milled frames, bleeding edge injection molding, glass, silicon...

It's done nothing but good for Apple to be aggressive and as vertical without owning the manufacturer as possible. Some of their processes are _years_ ahead of what anyone else can get their hands on, because they buy all the equipment, lease all the floors, and just throw money around like it's nobody's business. AMD and certainly Qualcomm can't touch em.


> Some of their processes are _years_ ahead of what anyone else can get their hands on

They are about a year ahead on CPUs. But pretty much everything else (screens, camera sensors, battery) has been on a par with, or behind what everyone else is doing.


Uh, no?

When they moved away from unibody laptops they did so by introducing friction-stir welding. That was hot tech on Boeing airplanes at the time. Some of those Boeing patents are still active.


I think I’m terms of pure features that most people care about, other manufacturers are on par.

But Apple products tend to have some really interesting manufacturing or technology. Machining steel for the iPhone 4, FSW, putting an Xbox Kinect into the notch, LiDAR, making edge to edge screens without a chin, custom silicon.

Most of this is easily replaced or omitted because it doesn’t really matter much to the end user.


They really add up. Face id was and is pretty "magical". Chins on other phones massively bother me, especially when they are just a tad larger than the side bezels. It's off.

Apple are able to provide unique experiences through their polish and proper concepts. Other manufacturers can even have the features, but they usually don't know what to do with them, make the experience bad and so nobody will care.



> unibody laptops

You mean the "unibody" made of two sheets of aluminum glued together in a way that the heat unsticks the adhesive?

https://www.youtube.com/watch?v=t7XSckjRPo0


That is a 20 minute piece of homework you just assigned. Time offsets please.

The bit I scanned through shows cracking due to dumb placement of holes. And that’s on the lid, not the laptop body.

Drilling holes through the edge of load bearing elements is still a classic failure mode for home construction, so I’m disappointed but not surprised. There’s a lot of bad blood about their hinges, and I’m not gonna fight anybody on that. They wanted the thinnest laptops, they got them, but not without consequences.

But part of that thinness was actually pretty smart, and that’s what we are discussing here. Using billet aluminum and CNC fabrication for complex shapes instead of gluing (gluing takes large contact points which means more material). Switching to airframe construction techniques was cooler and probably faster. Carving them out of solid aluminum was innovative mostly because it sounded so crazy. Stir welding sounded positively sober by comparison, even though it was hot shit at the time.


> You mean the "unibody" made of two sheets of aluminum glued together in a way that the heat unsticks the adhesive? [video link]

No. The unibody was the second gen redesign: https://en.wikipedia.org/wiki/MacBook_Pro#2nd_generation_(Un...

Rossman is handling a first gen MacBook Pro in this video, pre-unibody, and discontinued in 2008.

Not suprised to see Rossman succeeding in mining anti-Apple rage clicks.


>Not suprised to see Rossman succeeding in mining anti-Apple rage clicks.

Rossman's video is about the pre-unibody, but the first-generation unibody indeed had a heat-unsticks-the-adhesive issue. The EM209 issue (<https://randyzwitch.com/broken-macbook-pro-hinge-fixed-free/>) affected me twice, the second time not covered by Apple (<https://news.ycombinator.com/item?id=21542522>).


The laptop in that video is obviously not a "unibody" model. It is a A1260 MacBook Pro 4,1 from early 2008.

Eh I can think of many areas where Apple is behind its competitors pretty handily. Samsung has more advanced display tech, for example (OLED, integrated touch, polarizer-free, etc.)

Which is the exact same display in my iPhone, made by Samsung.

Usually the areas where Apple are behind are for simple reasons:

Competitor is using new unproven tech. Apple decided to wait.

Apple can't use new tech due to supply constraint (new tech supplier can't make enough to supply Apple).

Apple decided that new tech doesn't offer enough competitive advantage vs profit made selling old tech (720p camera vs 1080p camera).


Remember those days when you cannot have a larger screen … steve sometimes is a double edge sword.

Whilst the party lasted for apple it can buy the world. But would it last. We have to see. Hence saying it is a monopoly is totally off.


This seems to me a replay of when Apple bought out all the capacity of Toshiba hard drives to that effectively blocked other MP3 players from emerging:

https://en.wikipedia.org/wiki/IPod

https://9to5mac.com/2021/10/23/20-years-ago-today-ipod-chang...


Was it to block competitors, or was it because they were selling millions of iPod and needed all the capacity they can get? The iPod was not first to market and that Toshiba HD was available before but nobody was ordering it in any kind of significant quantity.

Probably a little bit of both.

How can it be both.

They either needed that many because they were selling that many.

Or bought way more to stop others from buying.


You can order parts today that you'll need in four, eight, twelve, sixteen months. You can do that even though both you and the competition plan to release new models in a few months, if you're willing to decide on the storage capacity of your next product already.

So how much you need is a forecast, or more precisely, a range of forecasts that depend on what you and your competitors will sell. Your order will say "I commit to buying x and want an option on y more" and a larger x gets you a lower unit price for the first x you buy.

If the vendor's production capacity is within your forecasts, or near it, why shouldn't you just commit to order everything and get a nice low unit price? You'll lose if your forecasts are very wrong, but then that's true whatever you do. It sucks for your competitors, who did not order according to their own forecasts.


Once they were selling a large enough quantity to begin with they can gamble their profits on overstock for future production, wiping out future supplies for competitors... at which point it's more of a guarantee, if there are multiple viable products and you remove all but one, consumers have no choice.

These are separate things (getting to the point of large scale production and blocking your competitors), e.g they could have played fair with the same initial success without excessive overstocking, allowing their competitors to continue competing and letting market forces decide, and letting suppliers gradually match current demand.

In short, there is no advantage to overstocking to such an excess other than to block your competitors. But you can only do so once you have a foot in the door and enough money to do so.


But there wasn't and will never be any overstock at Apple since Tim Cook started working there. In 2008 Apple still had Texas warehouses with old beige Mac but all of the Mac produced in the Tim Cook era do not last more than a 2 - 3 weeks in a warehouse. This includes components and this is why every January after an iPhone release the business journalists start predicting Apple's downfall because they lower their part orders for display, memory, etc. They don't let any of that stuff sit in a warehouse... EVER.

But did they overstock?

What I recall is them being production limited over and over again because their best wasn’t always good enough to stay ahead of demand. Nobody has talked about them hoarding.

Blocking competition was a benefit, but not the goal.


But they probably discussed it happening in a meeting. Therefore it also became a goal.

I think they bought what they needed, but that was enough to block others from getting produced.

Yes, unintentional side effect. I'm sure it crossed the minds of some the executives that they might be screwing their competition by buying out all the chips.

Apple is obviously not going to buy less so their competition can have more when Apple needed the supply.


Intentional effect.

The fact that it's one of severel effects and one of several motivations does not make it unintentional, or even necessarily just a side effect.

It could just as well be simply one of multiple fully considered effects, and surely was.


No one was demanding those hard drives, Toshiba was close to shelving it before going into production. Jon Rubenstein convinced Steve Jobs to invest in them for the music device they were building and 8 million was given to Toshiba so they can start producing these drives.

Not saying you're wrong, but an alternate interpretation was that Apple was just leveraging their large order size to get to the front of the line because they want to make products to sell. If you're TSMC, who are you going to favour - the large single customer who's guaranteeing order size over a period of time, or several smaller customers?

Several smaller customers; anything else would be myopic.

General business intelligence: You do NOT want one of your 'verticals' (companies that you need to buy supplies from, or companies that you sell your product to) to turn monopolistic; after all, once they are a monopoly they can really squeeze you out.

This holds even if you are also nearing a monopoly or are an effective monopoly (in that you're the only one that can supply it at the quantity and quality required).

There are mitigating circumstances, but most of them don't look good for apple:

* TSMC is stupid. Don't knock it - I've seen companies go for the quick buck, then get killed by the monopolistic monolith they enabled and be surprised.

* TSMC laughs in the face of this and simply isn't taking an apple near monopoly on chips particularly seriously. I can definitely see that - the risk is presumably that apple gains massive increases in marketshare of PCs/laptops and smartphones, but TSMC presumably doesn't think it'll be so high as to risk the situation that TSMC can produce more chips than non-apple buyers could buy. In other words, that apple's total 'TSMC fab capacity' needs won't go anywhere near 50% of what TSMC is likely to ever be able to manufacture.

* Apple is putting pressure on TSMC. TSMC knows this is a risk and doesn't want to, but apple does want this to happen and is making some shady deals so that TSMC does the math and decided that the gains in dealing with apple exceed the losses*odds-it-will-happen of the squeeze if apple is a monopoly buyer for TSMC (as in, of dubious legality and certainly of questionable morality, but then, it's apple, a company. Waiting for companies to act morally is silly, you write laws and set up societal systems to incentivize them to do so instead, companies are amoral (not immoral - they just don't really know what it is, by design).

Your comment seems to suggest it's a smart move for TSMC to just sign one giant deal with apple and be done with it: You can send the lawyers and salesfolk to early retirement, get some money upfront, guarantee 100% sales of all your fab capacity with a party that is unlikely to renege or declare bankruptcy.

It's not. It's a dumb move. Either the C-level execs at TSMC are missing something pretty fundamental or more likely we don't know enough to realize that there's sufficient weights on the other side of the balance to counteract the downside of enabling the monopoly on verticals.


The whole post seems a bit myopic, to be honest. First, TSMC is more of a monopoly than Apple is (and ever will be as long as they don’t care about entry level consumer devices).

Then, Apple gets a temporary exclusivity on the new node (which they helped finance), but this leaves a lot of capacity on the older nodes. These processes are still really good, the vast majority of TSMC customers don’t care about being on the bleeding edge for the sake of it.

Let’s be realistic: what would have been the alternative for TSMC? Leave Apple’s investment out of the table and waste time bringing their new process online without it? AMD or Qualcomm would not be in a much better position right now. Or TSMC, for that matter.

What is the end game you’re afraid of? Apple takes its business elsewhere? To whom? Wouldn’t this leave TSMC with paid-for facilities they could now use to produce chips for other customers at a discount?


> First, TSMC is more of a monopoly than Apple is (and ever will be as long as they don’t care about entry level consumer devices).

From TSMC's perspective, the entry level market isn't where they make their money. You can make entry level devices on old processes that have a lot of competition. It would be really bad for TSMC if Apple were to monopolize the high end of the market, because that's what uses the advanced process nodes TSMC makes its money from.

> Then, Apple gets a temporary exclusivity on the new node (which they helped finance), but this leaves a lot of capacity on the older nodes. These processes are still really good, the vast majority of TSMC customers don’t care about being on the bleeding edge for the sake of it.

Except that they do care, because they're competing in the same market. Apple is currently making a lot of hay out of the fact that the M1 is more power efficient than PC laptops, which is attributable in no small part to the fact that they're on TSMC 5nm when everyone else is on TSMC 7nm or worse.

If nobody was on the newest node, or Apple was making products that didn't compete with AMD/Qualcomm/Nvidia/Intel in the market, the others not having it wouldn't matter. When the device customer is going to prefer the best one, and the one on the best node has an advantage, it does.

> what would have been the alternative for TSMC?

If Apple isn't signing some kind of exclusivity deal requiring TSMC to give all of its new capacity to Apple, build more of it using their own money so that when it comes online, there is enough for more than Apple. If they are demanding exclusivity, inform antitrust authorities of this.

> What is the end game you’re afraid of? Apple takes its business elsewhere?

Suppose Apple monopolizes the high end market. They take 75% of it using the process advantage, then take the rest as the network effect from that crushes alternatives. They're now your only customer for the newest process nodes, so they squeeze your margins to zero. At the same time, they buy Global Foundries and pour money into it until their process is better than yours, and you no longer have the money to compete because you let all your other high end customers be destroyed.


>Suppose Apple monopolizes the high end market. They take 75% of it using the process advantage, then take the rest as the network effect from that crushes alternatives. They're now your only customer for the newest process nodes, so they squeeze your margins to zero. At the same time, they buy Global Foundries and pour money into it until their process is better than yours, and you no longer have the money to compete because you let all your other high end customers be destroyed.

It's what Apple did to Imagination Technologies and tried to do to Samsung.


I don’t think they needed to help finance the research. I think the apple volume is likely an order or two of magnitude larger than the next customer. It’s probably an advantage to have the large volume, and sync is making the right choice.

Similarly intels process issues showed up when they started trying to make xeon before the desktop processors.


TSMC may not have needed it but Apple did invest (pre-order) and they will continue to do so. There is not exclusivity but pre-purchased capacity and similar video games and kickstarters. They don't always work out for Apple (the Sapphire glass) but majority of the time they are working out perfectly (iPod Toshiba Hard Drives and the TSMC M1 cpus).

> more likely we don't know enough to realize that there's sufficient weights on the other side of the balance to counteract the downside of enabling the monopoly on verticals.

Because your angle completely miss capacity and resources planning. As the 30 years old joke goes, most expensive Fab in the world isn't the leading edge Fab, it is the Empty Fab. And then there is the initial capital and order guarantee. As a matter of fact, it is nearly the same across all industry supply chain. Insert Pizza Doll, Sausage Rolls, Paper Towels, or the recent pandemic event Toilet Paper, and your skill set from production line are all the same.

It is not Apple is without risk, so to speak. They will have to fill the Fab orders, even if somehow no one buys any iPhone. It just happens Apple has never had this problem. Compared to Qualcomm, AMD, Nvidia which all have their fair share of flops and market did not react as they expected. Or you could end up like Nvidia where they had three quarter worth of GPU stocks sitting channel during the BitCoin crash.

Getting Apple ( or the largest customer )'s order filled with a price premium is and will always be the simplest and effective way for the business.

And there is a huge market in GPU, HPC, AI, and Cloud Computing along with forever increasing chips in all segment. TSMC isn't really beholden to Apple like Dialog or PowerVR IMG.


You're missing that the customers aren't all buying the same thing. Apple is willing to make the investment/commitment and take the pain of shipping a product on a brand new node, and the tooling will last longer than Apple needs it for. That rolls from phones up (eventually) to big pro chips as yields etc improve, but then volume tapers off after a few years as most products move to newer chips on the next process. Apple needs a lot of capacity up front (iPhone launch) so they make the deals so TSMC can scale up. Later smaller players like AMD, NVIDIA, Intel, etc can use the proven nodes with less risk. 16nm/12nm is still perfectly good for lots of things. TSMC keeps the fabs busy for a long time, Apple gets the volume of parts they need at a good price. Apple doesn't directly compete with the other major semis so it doesn't really matter that they always have access to better manufacturing. It's all fine.

Having Apple as it's unique or main customer was a disaster for Imagination Technologies.

TSMC has a market cap of $600 billion, it is a totally different scale, Apple can't just push them around like they do with "small" billion dollar businesses.

They don't need to push them around....they will just pay more than everyone else combined.

I wrote that very badly. What I wrote came out to be about a diverse customer base which is obviously a good thing. What I meant to talk about was "predictable demand". Being able to know your exact order profile for a lead time of years is very valuable in manufacturing.

That said, Apple probably just invested money in their 3nm in exchange for priority (or similar) and maybe TSMC is being a bit short sighted.


Monopoly buyers are called monopsonies, FYI.

> the risk is presumably that apple gains massive increases in marketshare of PCs/laptops and smartphones

Apple is very far from monopolistic market share of smartphones and even much further away with Laptops. Apple with their intentionally overpriced products caters to a branded premium segment. They are not even aiming to take the mass market of low to mid level smartphones that makes up most of the market outside the US

I would also not be afraid if I were TSMC, especially as this is just about the new 3nm process that is catering to the highend market and doesn't eliminate the existing business.

Your comment reads a bit like there could be a distopian world where a shortage of 3nm results in Apple becomeing the only option for phones and laptops


This is complete FUD.

This is HN, the audience should know that VC's have a very strong preference for a large number of small customers over a small number of large customers, and why.

Obviously TSMC doesn't care about VC's, but the same reason why VC's prefer a large number of small customers still applies.


> VC's have a very strong preference for a large number of small customers over a small number of large customers, and why.

This is intriguing and I would appreciate if possible to get any sources to read up on this?


Anyone should prefer lots of customers to a few key ones. The latter have more leverage. They also make one’s metrics risky, as a single defection can swing the firm from profitable to barely eking by.

> Anyone should prefer lots of customers to a few key ones.

I think the caveat/variable is "all else being equal or close to equal."

If having 10 customers will net you $10 total per month, and having one large customer will net you $100 per month, it is really hard to justify going with the $10 customers. But if those 10 customers will net you $10 EACH per month, then the 10customers is a better situation.


Yeah but if 1 of your customers offers to prepaid for 10 years of service at the same price you wouldn't turn that away. Allowing you to maintain your other customers. Apple's pre-order of 3nm will get them priority as they ordered it before it was an option. (see Kickstarter)

As I said, "all else being equal or close to equal."

But it's not and it has been documented. Apple paid for the 3nm process years before TSMC had the fab ready. I'll bet that the moment a new process is available that Apple will invest in it as well.

At no point did I make any argument about Apple.

Makes your public metrics look better (ie "we have over 500+ customers!!!!") and also demonstrates (in theory) a more durable product.

When people see small number of large customers, the implication is you are basically just running an outsourced dev/consultant/staff aug shop. Less product vision and ability to "scale".


“too many eggs in one basket”?

Especially for a new untested company no customer is sure they actually need yet


> If you're TSMC, who are you going to favour - the large single customer who's guaranteeing order size over a period of time, or several smaller customers?

This depends on your business strategy: having a single or few customers makes you much more dependent on their whims and their negotiation power. If you have more customers you are in a better position for pricing negotiations.


Big point of strength for TSMC in negotiations is they're the only fab that can make 3nm chips in volume, which gives them a ton of leverage to push back against Apple.

Nothing to negotiation. Apple invested (pre-ordered) before 3nm was built.

When you have a monopoly on a single component, it doesn't matter.

Everyone has forgotten that when Apple moved to Intel, part of the deal was that Apple had the fastest laptop CPU for about 6 months.

To me this says as much about Intel as about Apple. When Intel has a new chip or a bin that has small yields, they can’t supply a large customer. But MacBook had maybe a third of the market share it has now, so that’s a relatively small niche you can supply while you boost your yields.


I wonder if they had the same competitive advantage if they were not allowed to use tax avoidance schemes. Smaller corporations cannot afford to build such structures so they have more difficulties to compete.

Making motherboards high volume that are faster than your competitors is something small businesses could not afford to do. We’re talking about one process that makes the same chips but more valuable.

And AMD and Qualcomm want more access to it than they have so they complain to the press. This is the supply chain folks.


Tax avoidance benefits build up through years. Basically smaller companies have less money to work with which is compounded by excessive taxes. Big corporations don't have such burden.

“My app depended on google and I have been banned”…

I don’t think so. This is the failure of having a choke point in semiconductor manufacturing and centralisation of all manufacturing infrastructure. No business is going to turn down the largest pile of cash being thrown at them. AMD and Qualcomm could of course have invested heavily in reducing this risk but no, they didn’t.

> This is the failure of having a choke point in semiconductor manufacturing and centralisation of all manufacturing infrastructure.

Arguably, bleeding edge silicon fabs are natural monopolies. Pushing transistor sizes down to atomic scales entails non-linear increases in costs to get decent yields. That's why there are very few fabs at the bleeding edge any more.


I’ve worked for a couple places where we as a vendor we’re not given the respect and/or margins that the customer’s road map demanded. It was lousy watching customers crow about us while we were going bankrupt. If a deal is too good to be true, it probably is.

I’m not claiming Apple respects TSMC more than Qualcomm does (but does Qualcomm respect anybody? They are practically the bad guys in any number of stories), but this is what respect would probably look like.

Speaking of Qualcomm, Apple is trying to compete with them on radio chips, so leaving TSMC probably works to that goal.


If AMD didn’t sell Global Foundry and had kept pace with investment for modern fans would be an interesting alternative reality…

Yeah, one in which AMD actually ended up bankrupt and Intel became the only vendor supplying x86 chips.

AMD just didn't have that kind of money.

Or what if UAE funds don't give up investing.

> AMD and Qualcomm could of course have invested heavily in reducing this risk but no, they didn’t.

We're in the middle of a chip shortage, though.


If, having seen the risk turn into reality, they want to buy some of Apple's capacity, they are free to make an offer.

Why would Apple allow that? They clearly have the money to outbid AMD and Qualcomm just to prevent them from competing, and the leverage to threaten moving their phones to a competitor and drop the prices for TSMC in the opposite case.

"It would be expensive to compete so why bother?" isn’t really how you succeed under capitalism.

The only way to analyse this as something bad Apple has done is to make out a case under competition or antitrust law in some jurisdiction. In Australia we have the concept of exclusive dealing, which the US (I think) doesn't have an equivalent to, but even then, it's extremely difficult to violate this law as a purchaser of goods/services, using money to buy them. This is because ANYBODY can acquire money and compete with you by offering more money. You could hold a monopoly on your own products (and then if you imposed exclusivity arrangements on purchasers of your products you would be abusing your market power to lessen competition), but it's essentially impossible to hold a monopoly on money itself.

In all, you're characterising Apple, competing fiercely in an open market, as preventing other people competing by being too good at it. That is a bit ridiculous. If AMD and Qualcomm die out as a result, it will be because they couldn't keep up, which is capitalism functioning correctly. Even under those very broad laws, the only party you can remotely fault is TSMC, and even then, they are literally just taking from the highest bidder, which is again capitalism functioning correctly.


Ultimately I'm not making a legal argument. All I'm saying is that it's very bad for the industry and for the public in general that Apple is the only entity that has access to the cutting edge and that it's only available in their golden cage. It doesn't really matter to me if this is capitalism working correctly or not, or if it's legal or not, ultimately all that matters is that because of this computing is being pushed back, we're not seeing as much competition on performance as we could be, and that's generally bad for everyone. I understand that Apple is just looking out for #1, I just think this is bad for the general public.

It's not Apple's fault that Global Foundry and Intel didn't invest in the 3nm. If you read up on Apple and Intel you would know that Apple (Jobs) was ready to use their CPUs for the iPhone but they won't produce anything other than the x86 (note: StongARM is shelved). Same crap happened with the PowerPC consortium. Motorola would not produce any enhancements in the CPU that dealt with graphics processing cause they only cared about their networking devices. IBM didn't care about power efficiency because they just wanted CPU that were going into their mainframe. Apple worked an agreement with Intel to make the Intel processor (not AMD) exclusive for the Mac, Apple would get new top of the line CPUs in quantity and Intel would get access to Apple's PowerPC patents (AltiVec). Intel also started to ignore the laptop market (just sold underclocked existing processors). Apple dabbled in CPUs with the iPhone 4S and years later released the M1.

Right, and I’m saying they are not the only entity with access, because all you have to do to get into the golden cage is have a really good idea and get financing, and that is possible. Letting everyone else get your idea of a fair share of production capacity to produce sub-par chips is not my idea of good progress. If they truly deserve capacity allocated to them, they should demonstrate they can design better chips, convince someone with money to fund it, and do what Apple’s done (buying TSMC a fabrication plant). That they haven’t done this, and they are punished by not having the cash to acquire production capacity, means that they will feel the pain, and have to start innovating their way out. This is what capitalism gives you: the fire under your butt to innovate. That’s how it’s good. If you prefer the lazy to succeed anyway, you are free to feel that way.

Edit, to address what you said exactly: this is the way in which losing out on capacity forces them to compete harder. If they fall behind in benchmarks for a few years, and you read that as a lack of competition, you are wrong: it is perfect competition, they fell behind, and are now working harder than they were before to design something better. Just because capitalism in the long term usually gets competitors to converge does not mean a temporary winner in the lead indicates competition is not occurring. Apple delivered a jolt to a market that had been flatlining, so there is more competition now than there was before.


But the chips are not sub-par. The entire point of my argument is that at an equal lithography the competition can outperform Apple. The performance advantage that Apple can demonstrate is under the margin of improvement from 7nm to 5nm all else being equal (RAM, TDP, etc..)

There was already a fire under their butt before Apple. Both AMD, Intel, NVidia and even Qualcomm are competing against each other. And that competition yielded architectures that are at least on par and very probably better than what Apple can do.

They can design better chips. They just don't have as much money as Apple. It's something that Apple already did before with, for example, the first generation of small HDDs, they bought out the entire production line and their competitors, despite being able to make MP3s that were just as good, had to wait for years to access the parts.


I wouldn't be too worried. If they are competitive designs, they will be able to get money to have them manufactured. There is lots of money to be made doing it, so there is lots of capital available. I don't think this will result in a huge setback to humanity's progress like you are making out.

But for now, you can't fault Apple at all for planning for this better than they did, but you can fault these companies for not raising tons of cash in anticipation this would be an issue. Darwinian capitalism applies to supply chain strategists too.


The designs are competitive, and they can't get the money to have them manufactured. By the time AMD and NVidia have access to 5nm Apple will be about to move to 3nm. They are going to have a full node of delay for the foreseeable future.

You can't just raise cash magically. I assure you AMD and NVidia were and are doing everything they can to raise as much money as possible and were trying as hard as they could to get capacity. They just couldn't outbid Apple. There is nothing that can be done for them to outbid Apple. They could have a 50% performance advantage and they still will never outbid Apple, because the majority of Apple processors aren't even being sold on performance.

Yes there is lots of money to be made. The issue is that selling processors is very competitive. There will never be enough profit to be made for them to outfinance Apple unless iPhone sales nosedive.


Right, so 5-10 years ago, seeing the writing on the wall, one of these companies should have bought/merged with another to pool more resources so as to remain a big enough bidder in the face of an entrant who would soon be massive. If the goal is to get a 5nm chip out the door today, maybe it seems hopeless, but if the goal is to compete with Apple, there are so, so many things to be done. It's a fair fight, they're just losing. I don't really have anything more to contribute, but this has been a good talk.

>but if the goal is to compete with Apple, there are so, so many things to be done

Can you give some examples? And a time frame in which AMD, Qualcomm, Nvidia can use the same tech as Apple?


I just gave you both. Merge, and 5-10 years. Also shepherd or buy your own chip manufacturer like Apple did.

Unrelated, I am shocked, shocked that people on this Silicon Valley hideout are downvoting me because they do not like the reality of capitalism. This is like complaining that Germany is unfairly occupying all of France's land in 1941, why can't they let the Allies have a small parcel of land up in Brittany or something, when Germany won it fair and square under international law. Apple owes them nothing. Get used to it, folks, if you think this is all very unfair, you have seen NOTHING, wait till you see what companies do when they decide they don't want to play by the rules!


Yeah everyone need capacity and only one player can get it first.

If Apple can open their war chest (which they created through years of monopolistic actions) and buy capacity, that’s not fair.

AMD didn’t run a monopolistic business with 90%+ profit margins for years, and couldn’t have done so.


Apple’s profit margins have never been 90%+. I recommend you do some googling before posting false information.

Apple has never had a monopoly on anything.

They just use the same silicon for a lot of products and have good profit margins, so they can place large orders with TSMC.


A significant portion of Apple profits is from the store, and the store has profit margins well in excess of 90%.

> Apple has never had a monopoly on anything.

We'll see what the EU antitrust commission says about that, so far there's been no legal decision in an independent jurisdiction yet.


“an independent jurisdiction”

Independent of what?


Apple has a monopoly on the iOS app store, which is a lucrative enough "market" to create systemic problems.

But from a physical perspective, they've never had the kind of monopoly Intel enjoyed for decades.


> Apple has a monopoly on the iOS App Store

The courts have ruled that the iOS App Store is not a monopoly.


They haven't, in the level of generality you imply. The ruling was much narrower: that Apple doesn't have a monopoly in the market of "digital mobile gaming transactions".

hmm, Nintendo, Sony, Sega and MS all have a monopoly on their stores. In fact, Target has a monopoly to their retail stores. You can't just sell your crap at Target because you want to. Also to probably lose 50% to the retailers.

> Apple has never had a monopoly on anything.

They do on thier secoundary markets, (esp App Store) but they are also being monopolistic with replacement parts and repair.


The App Store was ruled in court not to be a monopoly.

Apple sells tools and parts to anyone who wants them, so it’s not really clear what you are talking about when it comes to repair.

But even if there was some merit to that point, it’s silly to suggest that their repair policies have anything to do with them buying a lot of silicon from TSMC.


> The App Store was ruled in court not to be a monopoly.

What the court actually ruled was that Epic didn't make a good enough case.

Also, what the court said is that Apple does have "considerable market share of over 55%", but was not demonstrated to be an "illegal monopolist".

Which sounds to me like they were declared to be a monopoly, even without getting into related scenarios that are commonly lumped under "monopoly".

> Apple sells tools and parts to anyone who wants them, so it’s not really clear what you are talking about when it comes to repair.

What? They have a strong history of not doing that in recent years.


> Which sounds to me like they were declared to be a monopoly,

Weird read. They were declared to have just over half the market and not be a monopolist.

You choose to read that as then being declared to be a monopoly.

This does provide helpful insight into why so many people seem to claim apple is a monopoly.


> The App Store was ruled in court not to be a monopoly.

The App Store is a de-facto monopoly, it may not fit the legal definition of a monopoly but it practice it is (or what other App Stores can end-users install on iOS?). I'm not making a legal argument.

> Apple sells tools and parts to anyone who wants them

Where can I buy the tools needed to pair serialized replacement parts with the system? Regarding replacement parts, I don't work in the repair industry so I don't have first hand experience buying apple parts, but Louis Rossmann is telling a different story, do you have a source contradicting him?

> it’s silly to suggest that their repair policies have anything to do with them buying a lot of silicon from TSMC.

I'm responding to your claim that apple never had a monopoly on anything.


> The App Store is a de-facto monopoly, it may not fit the legal definition of a monopoly but it practice it is (or what other App Stores can end-users install on iOS?). I'm not making a legal argument.

Ford has a monopoly on Ford-branded floor mats! I mean you could choose other floor mats, but if you want Ford-branded ones they got a monopoly. A large audience is not a monopoly. I may not like Android phones, but they are sufficiently good, have almost all the same apps, and plenty of people have them.


Let’s not focus too much on the use of ‘monopoly’, but why we care about monopolies. A company doesn’t have to have one to harm consumers and markets, and harm can be things other than high prices. See: Lina Khan.

Some of the trust-busting policymakers’ discussions about tech products are painful to listen to, but it’s all trying to recalibrate anti-trust law to the rise of vertically integrated products, which have created amazing user experiences but but also high switching costs that create the conditions of a monopoly, without meeting the technical definition.


> Some of the trust-busting policymakers’ discussions about tech products are painful to listen to,

Because they are wrong.

> but but also high switching costs that create the conditions of a monopoly, without meeting the technical definition.

Because they are not monopolies.

If there is a problem, they should address that rather than trying to distort what is happening, otherwise they will simply make bad policies because they are being dishonest.


Pardon me, I think you misunderstand what I claim they have a monopoly on. They (obviously) don't have a monopoly on the mobile(or mobile software) market. They have a monopoly on the iOS software distribution market(a secondary market spawned by apple themselves). On an iOS device you cannot install a different App Store, therefor the end-user has no other choice than using Apple's App Store to download/buy software(=monopoly).

TL;DR iphones don't have a monopoly, the _AppStore_ has.

On Andoird the situation is a bit murkier, you technically can install software from outside Google's playstore, but you have to click trough scary dialogs(warnings about the danger of doing so), and App Stores installed that way don't have the same device permissions than googles play store have(you have to manually confirm each software update, for example). so yeah, on android it's debatable, but that's a story for another time.


Everyone has a monopoly on their own products. Samsung has a monopoly on Galaxy phones. Tesla has a monopoly on Model Ss. It’s meaningless to say that Apple has a monopoly on a certain part of the iPhone infrastructure, since it’s their product.

Of course they don’t have a monopoly on mobile apps or app stores or phones. There are competing products.


You're conflating the phones themselves with the secondary markets they create.

The problem is that Apple has a monopoly in selling/distributing Apps to iphone users. This is not the case on other operating systems, technically not even on android(eg. Samsung) and has nothing to do with a "monopoly on their own products".


You're calling a product (iOS app platform) a secondary market.

A phone is a product, the iOS app platform(or app distribution on iOS to be more precise) is a (monopolized) market, not a product.


Apple get's 30% from sales in their app store without doing much. It is a huge amount of money for very little effort.

Here's what developers get for their 30%, and yes for very little effort on the developer's part:

  - 24/7 worldwide availability, instant payment/app download
  - Easy re-install after deletion, you still own the app even if deleted
    from the device
  - Region restriction
  - Separate app pricing by region
  - Revenues paid to developer from multiple region currencies without
    conversion fees
  - Tax calculation and collection
  - Instant customer refunds
  - User rankings and reviews
  - App store advertising in category listings
  - Video previews of the app in operation
  - Packaging of media content allowing developers the ability to load game
    levels as needed. This allows a user to start playing your game quickly.
  - App sales stats

Also the App Store ripped 70% fee rates out of the carrier’s hands.

Apple’s 30% was a huge deal in the mobile software space when it hit. That’s why so many people defected. And when they started turning profits, others followed. Most of the millionaires IIRC came out of the second and third wave, before everyone and their mother were doing it and people were making money telling you how they made a million 2 years ago (tricks that didn’t necessarily still work).

I agree that it’s a shame that Apple hasn’t periodically lowered their fees. Even a couple percent would make news. However, a different group would cry monopoly (dumping) because it would have kept more people focused on IOS exclusive applications.

They did eventually bow to public opinion and they lowered the fees for small developers to 15% a couple years ago.

I keep hoping they lower the fees for everything except in-app purchases. I think it would do their customers a lot of good.


> lowered the fees for small developers to 15%

Worth noting that this covers almost all developers.


Development of that amortized years ago and maintenance + new features cost small fractions of that 30%.

So what if it amortized? That's why Apple made that investment in the first place, so that they can make profit out of it. If any app developer tried to re-create it now it would cost them much more than 30% of their revenue.

As someone also hosting my own fdroid repo for my own apps, no, it wouldn't.

You don't need most of that, and what you do need can be had extremely cheaply at 10-50€/mo + 0.2%


No it can’t. Almost nobody uses fdroid for good reason. It’s also simply not comparable from a business standpoint, dealing with the taxation and regulation in a hundred countries seamlessly.

But what if I don’t care about that? Why should I pay extra for something I don’t care about? I don’t need the marketing, I don’t need to be featured in the front page of the store, I don’t need taxation and regulation for 100+ countries.

Why should I pay for these things I don’t care about? Why can’t these be separate costs, which I could opt-in? Why can’t they be unbundled?


They also pre-bought all airfrieght that year so that they won't have any supply chain issues for the holiday season.

As an outsider, dealing with Apple as a vendor strikes me as dealing with the mafia: once they've set their sights on you, they'll make you an offer you can't refuse.

Should you accept, they'll give you a shot of capital in the arm and you'll grow faster than you ever could have to meet their schedules. Soon, your engineers are tied up in daily afternoon stand-ups to go over the latest data with Apple's engineers, and they're dictating your R&D schedule. Your company is effectively dependent upon Apple because investors expect revenue growth. Inevitably, however, they'll discard you when a cheaper competitor comes along, or they decide to take the work in-house.

Should you refuse, they'll poach away your employees, or enable your competitors to do the same.

I haven't thought of a scenario where a vendor can actually rebuff Apple and stay intact.


Has any of this happened to TSMC? Are they now the most valuable semiconductor manufacturer?

Which is not to excuse some of Apple’s less moral behaviour.


It's been covered in the media that TSMC loans its employees to Apple. You can also tell that Apple's fingerprints are on TSMC's leading edge node processes because products using it clock lower and consume lower power than comparable Intel processes. Also, to my knowledge, TSMC doesn't particularly stand out in semiconductor sub-fields where Apple doesn't play, such as III-V, embedded memory, and photonics. They are definitely at risk of getting disrupted in these areas.

Apple is the biggest TSMC customer. I would be astonished if Apple doesn’t influence TSMC’s R&D, product focus etc.

But to characterise Apple as somehow abusing their relationship with TSMC as a result of what you’ve said is not right. It’s just a normal commercial relationship between a customer and a large supplier.

Also bear in mind that TSMC has a large number of mobile SoC customers - maybe they think that’s their strength and focus on that rather than say photonics. Seems to be working!


Is Samsung 3nm competitive with TSMC 3nm? The information I'm finding online says Samsung 3nm pretty close to TSMC 5nm in density (for example [1]).

[1] https://www.breakinglatest.news/business/samsung-3nm-technic...


Yes, because Samsung decide to be the world first in GAA ( Gate All Around d) hence first generation of 3nm is essentially a TSMC 5nm in density but slightly better in performance or energy and power on paper. ( Blame Samsung ) Think of it as TSMC 4nm.

Their 2nd Generation 3nm which should be what AMD and Qualcomm are using should he little better than this but we dont have any data. ( yet )


There is a bigger problem than Apple first that the article does not mention. It is Mediatek second (i.e., after apple). Mediatek used to be a strictly second tier mobile processor maker, with Qualcomm and Apple's internal team occupying the first tier. Now Mediatek has overtaken qualcomm in market share. The main reason is that TSMC is making more chips for Mediatek than Qualcomm.

One can explain TSMCs preferential treatment for Apple based on purely commercial terms. Apple is after all the biggest foundry services consumer and they usually demand the advanced nodes which tend to be more expensive.

But there is no such explanation for TSMCs preference for Mediatek over Qualcomm. Qualcomm is generally as large as Mediatek, in fact they used to be significantly larger before TSMC hobbled them.

Well the first explanation that leaps to mind is patriotism (mediatek is a taiwanese company like TSMC, Qualcomm is American). But if that plays a significant factor then perhaps the chipmakers of the world should not so eagerly trust TSMC to make their chips.


> But there is no such explanation for TSMCs preference for Mediatek over Qualcomm. Qualcomm is generally as large as Mediatek, in fact they used to be significantly larger before TSMC hobbled them.

Qualcomm has a longstanding reputation as a bad actor; they're the Oracle of hardware. It's easy to believe that other companies would prefer to avoid doing business with them.


Doing business with people who live in the same area, speak the same language and have the same culture is a lot easier and less risky.

Much more likely is that MediaTek was willing to invest what's needed (i.e. agree to TSMC's asking price) to catch up to / overtake Qualcomm.

Qualcomm as incumbent could've taken too much time trying to negotiate a lower price (e.g. "if you don't lower your price, we'll go to Samsung!").


It’s interesting that Apple’s decision to transition to their own chips was probably lead, at least partly, by the fact they knew the could lock down all this next gen production.

If everyone else had access to cutting edge TSMC I’m sure Apple’s chips would still be good but I don’t think we’d be quite as impressed.


It's "interesting" that I never read any posts about how unfair it was when AMD was using TSMC 7nm to beat Intel. Makes you think, it does.

Unlike AMD for 5nm, Intel was free to fab their chips on 7nm at any time and chose not to. It's not an analogous situation.

Because Intel had full control of their own design and fabrication. And while they had problems advancing their fabs, they also could have bought some TSMC 7nm capacity if they wanted to. That's fair. On top of them earning a loss by sticking with stagnant designs for so long.

Probably because TSMC 7nm =! Intel 10nm

> It’s interesting that Apple’s decision to transition to their own chips was probably lead, at least partly, by the fact they knew the could lock down all this next gen production.

Eh? The vast majority of Apple chips that will be made on this process will go into phones, and Apple has been doing its own phone chips for about a decade. The M1 won't be quite a rounding error, but it won't be far off; they just don't sell that many Macs.


It is an integrated strategy: volume + design + supply chain + market power. Apple's CPUs are designed for scaling and binning. The chip designs, along with products like iMac and Mini, can be adjusted to respond to manufacturability and yield. Apple draws a winning hand no matter how the deck is shuffled.

Exactly Apple made themselves first because otherwise AMD and Qualcomm would have been hogging the capacity but it’s only unfair if Apple does it.

When did AMD and Qualcomm ever exclusively operate a cutting edge node? Apple would have had to deal with reduced supply, but so would every other player.

Not that we know of, for hardware supply.

Microsoft can't supply ARM Windows to Qualcomm's competitors. Windows can't be ported to anyone else's ARM chips because of an exclusivity agreement with Microsoft.


If everyone had access to cutting edge processes, Apple silicon would be behind. They're not even cleanly ahead despite a generation leap in RAM and in processes in CPUs and they're still behind in GPU performance per watt compared to NVidia on 8nm. If Apple wants to lead in performance they can't allow NVidia and AMD to be on the same process. They would even risk Qualcomm chips catching up.

Extraordinary claims require extraordinary evidence.... but I guess we could settle for just ordinary evidence, if you could care to provide some. Because, in its absence, what you wrote doesn't ring at all true.

How is this the case? AMD mobile CPUs, core for core, are anywhere from 13% slower to 20% faster (between Geekbench and Cinebench r20 and everything in between), and the M1 Max has a generational process advantage and 2-3x faster RAM, despite a similar TDP. In multicore, the Apple processors plainly consume way more power (62W vs 35W sustained) than any of the latest generation AMD processors yet released. Clearly the gap is within to ~25% process advantage and that's without taking into account much faster RAM.

Same goes in phones. The A14 is around 10-20% faster in all metrics than an 888 and has around that much of a process advantage.


You seem to be comparing the nominal TDP of AMD chips against the actual measured power of Apple chips. It's really not safe to assume that a chip's advertised TDP is well-correlated with real power consumption for any particular workload; a sound comparison requires matched power and performance measurements. This is especially necessary when discussing benchmarks that have a short duration or are a variable workload, because a single TDP number cannot convey turbo behavior.

I am not assuming that. The 5980HS actually consumes only 35W for sustained loads. It can boost up to 62W for 1-2 seconds and then drops to 42W and soon drops to 35W after a maximum of 5 minutes.

The SPECInt suite lasts from 1000 to 3000 seconds. Therefore the 5980HS was at 35W for the vast majority of the test.


> The SPECInt suite lasts from 1000 to 3000 seconds. Therefore the 5980HS was at 35W for the vast majority of the test.

That cannot be presumed based solely on the nominal TDP and the total duration. SPECInt is a suite of a wide variety of sub-tests. It is not at all a consistent sustained test like the Prime95 results you are using as the basis for the turbo behavior. Actual power consumption during SPECInt is highly variable, because the workload itself is highly variable. Whether it truly averages out to 35W over the full duration is something that must be measured, not assumed. And you definitely cannot generalize your assumptions to apply to benchmarks or workloads with durations that are not far longer than the 5 minute turbo duration observed under Prime95.


That's not how the turbo works on this AMD mobile chip. There is maximum time that the chip can sustain turbo and that is exactly 300 seconds. As long as the chip is in it's maximum p-state for the duration of the MT test, it will count towards that 300 second turbo time. Prime95 uses more ALUs, caches, and pipelines and thus hits the thermal limit faster and at the same power runs at a lower clock, but this isn't a thermal limit, it's a power limit.

Indeed, we see the 300-second turbo limit not only on Prime95, but also on lighter, real-word tests like on an Agisoft DC workload.


I'm not contesting that the AMD chip in question (as typically configured by notebook OEMs) will not remain in turbo mode for more than 300 seconds at a time. What I'm pointing out is that you cannot assume that all workloads are steady enough over time to produce the simple sustained behavior illustrated with Prime95. This is especially inappropriate when you are referring to another test that directly contradicts this assumption and illustrates variable performance and power consumption, where power does not always stay at 35W even after the initial turbo period is over: https://images.anandtech.com/doci/16446/Power-Agi-5980HS-Per...

If you look closely at the Agisoft test, you will see that it does not exceed 35W until first dropping under 35W, and indeed the average power consumption still does not exceed 35W after the sustained 35W period.

Therefore the assertion that the 5980HS cannot have been exceeding a 35W average load by very much over a 1000-3000 second long test is correct. As you can see after the 300 second initial turbo period the 5980HS is not averaging much than 35W, while the M1 Max is averaging much more than that for multiple sub-tests.


Well that's a load of bull that you just wrote.

Qualcomm uses the exact same process that Apple uses for the 888 and TSMC produces it, yet it's inferior in every way to the A14


The 888 is produced on Samsung 5nm LPE, not TSMC : https://www.anandtech.com/show/16463/snapdragon-888-vs-exyno...

Despite an inferior process, the 888+ and 888 are only 10-20% behind the A14 in most metrics including energy efficiency, despite being on a process with 35% lower density.


That didn’t work out and they switched to TSMC - https://www.notebookcheck.net/TSMC-to-manufacture-some-of-Qu...

I can't find anything saying those chips have reached market, let alone a benchmark.

Everything I can find suggests new model numbers too.


> generation leap in RAM

You mean the exact same LPDDR4X that everyone else uses now? Maybe not in huge quantities but there are a lot of AMD Renoir and Intel Tiger Lake laptops with the same 16GB setup.


The M1 Max and M1 Pro uses LPDDR5, not LPDDR4X. LPDDR5 is around 6 times faster than LPDDR4X but the CPU can use a bit less than half of that.

If you compare the M1 that uses LPDDR4X it loses or ties in multicore and is barely faster in single core.


Wait, how is LPDDR5 6 times faster than LPDDR4X? I thought the bandwidth of DDR5 is roughly 2x that of DDR4 - and that is assuming you run the DDR5 at it's highest rated clockspeed, which no ones does yet since the technology is not fully mature.

I think he meant whole systems. M1 Pro comes with 256bit bus (2 custom LPDDR5 chips) and 200 GB/s, M1 Max with 512 (4 custom LPDDR5 chips) and 400 GB/s. M1 is 128bit bus (2 custom LPDDR4 chips) and 60 GB/s?

400/60 = ~6


> LPDDR5 is around 6 times faster than LPDDR4X

6 times?! What? No generational improvement in the last decade (if not two) was six-fold.

https://www.samsung.com/semiconductor/dram/lpddr5/

Samsung marketing says 1.5 times.


Source?

Fierce competition in this space is a good thing, we sorely need faster matrix multiplication for everything from graphics processing to the grammar checker in [insert name of your word-processing software]. So yes, more transistors please.

Do we really? (Serious question - what are the end-user applications that cannot be done today because of the lack of faster matrix multiplication?)

VR headsets, games running at 4K 120fps, etc…

Anything using massive linear algebra.


4K 120fps - is that "sorely needed"?

Of course not and "640K software is all the memory anybody would ever need on a computer".

No. I am asking if there are genuine new use cases that will be enabled by say a ten-fold increase in processing power? Other than it is nice going from 2K at 30 Hz to 4K at 120 Hz (which is an 8-fold increase).

Your question is difficult to answer in good faith because "everything" would benefit from a ten-fold increase in processing power. Super computers could process protein foldings faster, any kind of simulation really could benefit from it. Deep learning could eat a ten-fold increase overnight (especially if accompanied by faster buses and memory) gaming at 30Hz is really not great, gaming at 60/120/144Hz is much better. VR was already mentioned in this very thread.

I answered your question with a joke because your question is a joke, what doesn't benefit from a 10-fold increase in processing power? Why would no new use case arise from a widely available 10-fold increase in processing power when the last 40 years have shown that new tech always materializes?

Or maybe you just wanted to make a cynical statement, that all this tech from the last 20 years was pointless, that social media are a net negative for the world, that better video game graphics are pointless because only gameplay matter, that smartphones (only possible because of a previous wave of 10-fold increases) are only addictive little screens and not actually useful in everyday life?

Yes there are genuine new use cases that would appear with a ten-fold increase in processing power. It's a certainty.


> I answered your question with a joke because your question is a joke, what doesn't benefit from a 10-fold increase in processing power?

You misread the question pretty badly. They asked for new use cases, not things that would benefit.

We can fold proteins pretty well now, 10x wouldn't fundamentally change things.

There was a point where 10x in power made VR feasible. We're past that point, and can already do 144Hz VR with pretty good graphics. More power would increase the resolution but that's not a new use case.

Deep learning, hmm. A 10x increase in GPU RAM would be pretty great for using things like GPT-3, but the limiting factor there isn't really processing power.

Remember that you said "sorely need". That's a much stronger statement than benefiting.

> Why would no new use case arise from a widely available 10-fold increase in processing power when the last 40 years have shown that new tech always materializes?

Well, I can look back about a decade for the last 10-fold increase. Everyone has an SSD now, that's major but not based on processing power. VR is the only significant new use case I can name. That's cool but it's not exactly a big impressive list.


> Well, I can look back about a decade for the last 10-fold increase.

A decade ago (2011) we didn't even have "deep learning" with the real increase starting around 2013 when GPUs became good enough that things like AlexNet/ImageNet were practical so that's one.

> You misread the question pretty badly. They asked for new use cases, not things that would benefit.

I answered their question pretty directly, and I address your point in my reply as well. 10-fold increase in computing power brought us affordable smartphones (in 2011 iPhones existed but were mostly for the well-fortunated among us).

10-fold increase in processing power brought us the video streaming services of today. Without modern processing capabilities Netflix and co. probably wouldn't exist in any capacity. A 100Gpbs network interface just wasn't a thing in 2011 and it's not because engineers didn't have the idea.

A new Pixel 6 can erase people from my pictures automatically on-device, that's another very nice use case that wasn't possible with the hardware of even five years ago.

If you want to argue that a 10 years horizon wasn't large enough then sure, but there are literally thousands of use cases that only exist because computing scales and gets cheaper every year.


If we asked this question in similar terms just a few years ago we wouldn’t have things like consumer VR and AR.

You absolutely need high refresh rates and frame rates for VR, or else you get motion sick and/or lose immersion.

You’d pretty much always benefit from higher resolution for VR since the pixels are being placed much closer to your eyes and spread across your entire peripheral vision.

VR reduces the resolution your GPU can handle at the same level of performance/fidelity because two separate images are drawn.

The increase in performance in graphics cards is enabling entire industries to exist and accelerating scientific research.

Phones in your pocket are performing on-device ML and AR in ways previously thought impossible. They’re being used to shoot actual movies that are shown in actual theaters.

Low power tech like smartwatches wouldn’t be possible without these breakthroughs because ultimately faster processors also imply low power devices that can actually do decent amounts of computation.

So to answer your question, new use cases have already been unlocked by simply having more processing power to play with. It’s never been the case that all possible use cases are crystal clear before the tech that enables those use cases exists.

If you want to know why Facebook changed their name to Meta, it’s actually because they see a near-future of VR/AR devices getting a lot less clunky to the point where they can offer a seamless virtual social network and/or truly next generation video conferencing where everyone feels like they’re in a room together. While the exercise may appear to be damage control from an arrogant billionaire, I can see the argument and business case for their vision.


> If we asked this question in similar terms just a few years ago we wouldn’t have things like consumer VR and AR.

Things won't stagnate just because the sales pitch for a new product might be "no new use cases, it 'only' makes things smoother and a quicker and higher detail".

Getting that out of the way, not every increase in power is equally useful. It's a fair question to ask. VR is good and newly enabled but that doesn't mean we're going to get a bunch of tech with similar potential in the next handful of years.

> Phones in your pocket are performing on-device ML and AR in ways previously thought impossible. They’re being used to shoot actual movies that are shown in actual theaters.

The fancy algorithms are somewhat important to picture quality, but for photos slower would be okay and for video you could run it in post without much disruption.

> Low power tech like smartwatches wouldn’t be possible without these breakthroughs because ultimately faster processors also imply low power devices that can actually do decent amounts of computation.

On the other hand, we've had pretty complex devices that run on button cells available for decades. And a lot of that power is taken up by the screen and radios rather than processing. And... wait a second, the original Apple Watch came out so long ago, it was around 8x slower than the current model.


Basically what you’re saying is that we can get by with worse tech.

Well, yes. You can use a Casio calculator watch from the 80’s to make calculations. We got by just fine before computers existed at all.

But that’s not really the point. The point is that there is value in simple raw horsepower. If there wasn’t, all these chip manufacturers would pack up their bags and shut down their R&D departments, because businesses don’t pay people to make things that have no market value.

It is an inevitability, in my opinion, that extra horsepower will enable some kind of new experience, however minor. Your example of the original Apple Watch is perfect here. The original Apple Watch barely functioned, for staters, and had a reputation for being slow. It didn’t have GPS, cellular, always-on screen, or a number of other features that need a very powerful and power efficient chip, display, and wireless modem/chip. All of these features are things that have market value.

I’m honestly not sure what you’re trying to say we should do here, not try to make computing faster? Why?


> Basically what you’re saying is that we can get by with worse tech.

> I’m honestly not sure what you’re trying to say we should do here, not try to make computing faster?

No. I'm saying that if you look at tech, generation by generation, faster is sometimes just faster. It doesn't always enable new use cases.

There's no extra subtext. I'm not saying we should stop making things faster. I just don't want the benefits of increased speed/efficiency to be overstated.

I don't think "we sorely need faster matrix multiplication" is true. It's just a nice-to-have. Which is still enough reason to make it! But it's a different level of benefit.

> It is an inevitability, in my opinion, that extra horsepower will enable some kind of new experience, however minor.

Sufficiently minor things aren't "genuine new use cases" that we "sorely need".

Eventually you'll hit a new use case, probably, but you might get zero new use cases for a long time.

> Your example of the original Apple Watch is perfect here. The original Apple Watch barely functioned, for staters, and had a reputation for being slow. It didn’t have GPS, cellular, always-on screen, or a number of other features that need a very powerful and power efficient chip, display, and wireless modem/chip. All of these features are things that have market value.

Not very much of that depends on computation getting faster.

And I never said "faster" has no market value.


I replied to your other comments but now I see that you are arguing in bad faith and I regret the time investment.

> It doesn't always enable new use cases.

It doesn't have to always enable new use cases, you are just moving the goalpost.

> Sufficiently minor things aren't "genuine new use cases" that we "sorely need".

A use case is a use case, you don't get to redefine what you consider a "major" and a "minor" use case to justify your bad arguments. That's another example of moving the goalpost.

> Not very much of that depends on computation getting faster.

That statement is so objectively wrong, power efficiency is a trade off with processing power, if we can make a faster chip we can make a similarly capable chip that consumes less power.


False equivalence

In that sense no it's not needed. In fact computers aren't needed at all. We made due without them for thousands of years.

The equivalent of that (or more) is needed for a good VR experience.

Imagine being able to have the top of the line graphics performance that you can get now but on a chip the size of your fingernail in the future and the kind of industries that would be created once that became possible.

Lightweight AR glasses that can last whole day on a 1000mAh battery.

I think the opposite is true. Modern Hardware is more than fast enough for pretty much all end-user applications(except maybe high-end gaming, but that's not sorely needed), we're just too wasteful with all the performance we've already got.

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