Competition is great, but also in this case geographical redundancy; having the entire world depend on chips produced in one of the world's most likely military hotspots is terrifying.
Still pretty amazing that there's basically one global top-tier chip supply chain, with hundreds of companies, some of which are sole-source at the scale of 6-12mo+. ASML is as much a bottleneck as TSMC.
Yes, this is _one_ of the reasons I think TSMC is fairly safe from doomsday theories like China trying to cut it off from the world. Because that would risk it being cut of from ASML, and they are unlikely to be anywhere close to making their own machines before grinding to a halt.
Short term, it's mutually assured fabrication destruction; Long term, the world needs more redundancy and competition in both areas.
I think the idea was that China cutting off TSMC would prevent TSMC from accessing ASML fab tools and maintenance, which would quickly degrade TSMC capabilities.
Edited to specify China as the one who would potentially cut off TSMC from the rest of the world, which would also cut off ASML->TSMC.
At this time, US sanctions cover even NXT:1980Di (Netherlands will be soon pressured to do the same). That is from 2016 and is least advanced DI ASML still makes.
Well, SMEE is rumored to have 28 nm already. China isn't going to get EUV lithography because the US is not going to give them that. ASML can't sell them those machines because the US controls their EUV license and makes the rules.
But the majority of chips they need can be built on this process if they have it. They don't need ASML if they got here. And they can't have ASML's new stuff.
FWIW, that's about where Intel was 14-15 years ago. That's a reasonable process for lots of logic chips, but not for modern mobile devices or datacenter machine learning engines.
Yep but it's a huge leap forward if indigenous. They can get to 22 nm from there which is enough for the majority of microchips.
ASML is only relevant to them if they need to get to present day GPUs and mobile devices (as you said) and I don't think that's that important for their needs. But even if it is relevant they have no access to ASML tech because ASML only has that because the basic research is US-owned and the USG will enforce their export controls on ASML and will enforce that critical components are made here so playing nice with Taiwan won't get China any closer to EUV lithography.
Not clear to me that it's "indigenous". They're surely buying lots of ASML and TEL and AMAT tools like everyone else is, just not the fancy new EUV stuff they can't get. Absolutely it would be news if China was generating 28nm chips with a 100% domestic industrial base. But I don't think that's the case?
ASML machines can presumably be rendered largely worthless remotely through firmware (or by being forced to operate out of design spec for a while, causing physical damage), and I have to assume TSMC/Taiwan/US have that stuff pre-rigged (physically or software), too.
These are some of the cleanest rooms on the face of the planet. These processes are ultra-sensitive to any kind of physical disturbance, dirt, etc. These individual machines are hand-assembled by ASML on-location.
TSMC under peacetime conditions has issues obtaining acceptable yields on this equipment. In an armed conflict, there will be no operation at all, much less one that requires a Stuxnet-style attack to shut down.
We're going to get that. We only have a handful of nodes left, so every geopolitically relevant region is scrambling to have last leading edge fabs on their soil for defense use cases if nothing else.
My guess is that US, China, and Taiwan will all have essentially equivalent fabs, Korea and the EU will have what look like cheaper versions until everyone figures out that they don't have the yields the promise and so it's actually more expensive but propped up by .gov money (even more than the first group).
I wouldn't be surprised to see another one shared by Brazil, India, South Africa (and maybe Russia) that kind of works, enough for low volume defense projects.
I think it a testament to the collectively perceived value of semiconductors. I'm saying IMO no matter where in the world the fabs were that place would be a military hotspot. the miltary hotspotness will follow the top of the line fabs
additionally, I take it as evidence of the perceived value that people gone to great lengths to avoid widespread proliferation of this techniques because scarcity is a value amplifier. so by keeping it scarce its value increases.
so if I'm correct, if/when there are multiple comparable fabs in multiple parts of the world the geopolitical risks should go down in taiwan
finally, having typed it out, I feel my whole argument is wrong...
> I think it a testament to the collectively perceived value of semiconductors.
Taiwan has been a subject to threat of invasion for a long time before TSMC was a thing.
A short while ago Intel had the best fabs and CPU chips. Nobody thought another country invading USA was plausible.
> so if I'm correct, if/when there are multiple comparable fabs in multiple parts of the world the geopolitical risks should go down in taiwan
No. Taiwan has for decades been a point of geopolitical tension between powers around in Pacific (which currently is US and China). The existence of TSMC makes the rest of the world care more (or scared more), but the PRC isn't just going to give up its decades long goal of taking over Taiwan because there's another TSMC somewhere else (or even in mainland China).
I feel like it would be a lot harder for China's military to target a fab in landlocked Arizona than one in an island nation 100 miles off the coast of Xiamen.
growing up, I remember visiting and touring AMD in high school through some youth technology summit. It felt like AMD were these tiny little Davids against this absolutely enormous Intel goliath. How did the dominance ratio shift so dramatically?
The trade secrets in question seem to be yield and inventory numbers according to the article. Certainly interesting, but not sure how this helps Intel with their foundry business?
As they always say in investing, "Past performance is no guarantee of future results."
It wasn't that long ago that Intel was dominating and it looked like nobody would ever dislodge them. Once the top management that drove a company to success retire, they are almost guaranteed to be replaced by people whose main skill set was political navigating in a large bureaucracy and then the decline begins.
In this case it does make sense for Intel to catch up - right now NVIDIA is a quasi-monopoly in the AI space due to the stranglehold on CUDA - and all competitors are working day and night to close the gap in the toolchain.
I think it's a plausible conservative prediction that Intel will close the gap somewhat and will have a significant (but not dominant) slice of the pie.
To be fair their stock wasn't necessarily doing that great at all (relative to AMD , let alone Nvidia over the last few years) when they were completely dominated the market.
Even with all dividends included their stock is worth about as much as back in 2000 (which they only managed to surpass in 2019/2020)), and if they are excluded they are yet to surpass their dot.com peak...
Even if they can catch up with the technology...can they high volume manufacture it? Can they manufacture it at a similar price point as TSMC?
All signs point to No. They have the talent to have competing tech...but they have shown time and time again that they can't do high volume manufacturing or do it at a price that also allows their customers to have high gross margins (like AMD, NVIDIA, etc).
There is a big difference in making a technology work and making a lot of high yielding wafers with it. I'm not sure Intel 7nm ever got to high volume manufacturing...there were constant delays and yield issues. Read the 3rd article I have below to show how bad it is. Plans to implement SR in 2021, but yields were crap and mass production was put out to 1H23. Intel and TSMC use very different terminology for when things are ready...manufacturing ready (Intel) is being assumed to be the same as high volume manufacturing (TSMC), but they are not the same at all. TSMC is doing 2nm risk production in Q4 this year, we will see what Intel ends up doing...
The far ahead argument is something I read weekly on investing boards
Some claim tsmc is decade ahead, other say it is 3 to 5 years, etc, etc.
From my understanding both are in a race that will be decided in next 10-14 months and when it comes to the future, Intel has priority on next gen EUV (HighNA), so there is a chance
Various medias report that Intel has 1-2 year advantage due on tech like PowerVia
So, it is not that clear how far ahead TSMC is
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>TSMC isnt stupid
Yes, they arent, so arent their customers who want geo diversified supply chain and risk amortization (Earthquake? War? Drought?)
Also they will have leverage when negotiating deals with TSMC
I am somewhat skeptical about high-NA EUV. There are reasons why Intel got priority on that: ASML marketing materials themselves imply high-NA EUV is worse than low-NA EUV in terms of cost.
> Also they will have leverage when negotiating deals with TSMC
Except Intel hasn't talked about price at all...they have a completely different cost structure that isn't competitive at all. Think about AMD gross margin vs. Intel's gross margin. AMD has similar...all while giving TSMC 50%+ gross margin also. Now tell me Intel's cost will be similar to TSMC...
Their foundry business is a tiny fraction of their revenue at this point and I'm not sure their overall gross margin is particularly relevant here (also Intel has lower gross margins than AMD or TSMC these days?)
If they can't make good gross margin when making their own products that are higher priced (than similar AMD products)...how are they going to do it when they have to support an end customer that expects high gross margins?
In 2015, why would anyone have believed AMD could catch up to Intel? Let's not forget that the Bulldozer/Excavator days are not that long ago, and those chips were even less competitive in 2011-2016 than Intel's current offerings are in 2024. I think we can confidently say that bigger architectural gaps have been closed before.
Comparing Intel to other fabs, it's uglier, sure. The Krzanich years were characterized by over-promising and under-delivering, and Intel isn't far enough removed from that period for trust to be rebuilt. That said, they have shrunk the process gap over the last couple years, even if the gap isn't entirely closed.
Given the firehose of government money being directed at domestic manufacturing right now, I assume Intel is doing fine on the "shitloads of money" front.
I don't think Intel is a favorite to be the world's process leader by 2025, but it's reasonable to think they could get close. I don't think the doom-and-gloom perspective is well-founded at all.
I invested in AMD around 95 levels, but I started selling them on recent tops around 175-180 to buy more INTC when they dropped after their guidance for Q1
It is not that I dont believe in AMD, I just believe that their growth potential is lower than INTCs.
Foundry businsss is crazy and has waaay higher entry level
What is your cost analysis on Intel's foundry arm? If AMD can support high profits using TSMC as a supplier...who also has high profits, why do you think Intel can compete on price and make good money?
I see TSMC and Intel cost structures all the time...they run fabs very differently and the costs are no where near close to each other. When running a foundry the main component of being competitive is price and yield. Intel will struggle with both...mark my words.
Worth mentioning that the Microsoft processor will be made on 18A process. That means Intel is confident they can start offering it to their customers by the end of 2024 as planned.
Why would that mean they are confident? You always get customers ready before the technology is ready...you think TSMC doesn't have 2nm customers lined up already?
I’m not privy to the details of the contract between Intel and Microsoft, but such explicit mention of the technology usually means there are financial penalties if Intel can’t deliver. They wouldn’t commit to it unless they think they can make it work.
Some details about cooling these devices would have been informative
in either the article or the white paper. All I know is that my crummy
consumer-grade Intel processor thermally throttles almost instantly
under load despite a bulky liquid cooling block on top of it. What
breakthrough is going to enable a closely stacked ensemble of them
to perform acceptably without overheating?
> All I know is that my crummy consumer-grade Intel processor thermally throttles almost instantly under load
That's... the design. You have a boost clock and a sustained clock spec, and the latter is what you're guaranteed to get "under load". Usually it will do better with most parts and cooling solutions (note that the motherboard regulator hardware matters too!), but the load performance will always be "throttled".
Basically you've just misunderstood. This isn't the 90's and clocks aren't fixed things. It's impossible to treat your criticism without numbers.
Without knowing the load and what the frequency looks like over time, it's very hard to say if this is incorrect or normal behavior.
As others have stated, modern Intel and AMD chips essentially boost as hard as the cooling solution will allow to eek out that last few % of performance.
It's not just the cooling block; little things like rough surfaces, voids in the thermal paste, or too much thermal paste can make a huge difference in the cooling performance.
Tech Ingredients has some detailed discussion in the linked video ~28:20 regarding surface preparation and paste application. (Lasers not CPUs, but the principles are the same.)
Something happened recently (or maybe not so recently. I am an old fart) with the cooling situation. Previously a beefy air cooler could give you good performance at a low noise level. Now they all sound like jet planes when they try to dissipate 200w of heat.
Heck, even my 420mm AIO was struggling with the newer processors before undervolting. With AMDs latest series I have started using eco mode. An undervolted 7900x at 88w ("105w TDP") is at 95% of stock performance and doesn't make a sound with a decent air cooler if you are comfortable with it staying at 85 degrees C when doing work.
The single thread performance is the same, and I managed to have a stable boost of 5.8ghz for single core workloads. It compiles code good enough for me, and the occasional Minecraft session is a breeze.
The biggest problem Intel had was that their process was optimized for their high end processors. Everything else (within the company) suffered.
For Intel to succeed as a foundry it needs customers that target the same "high end, power hungry" market segment. I don't see how Qualcomm (low power) fits that niche. More likely big AI accelerators (like, perhaps, Microsoft is planning).
As long as Intel depends on its high end processors for most of its profits, it will be difficult to develop a low power process for other, less profitable, customers.
I want to be one of those customers, but it seems quite obvious to me, if you have to ask, you can't afford it. There's no conceivable future in which the minimum costs are small enough that a start-up can design a chip and get it made before running out of funding.
There's no nearly-conceivable future where the minimum costs to design a 28nm or below chip are tractable for most small companies, but even most capable individuals can design something on 130nm and afford to have that taped out today.
Probably NV and most likely Qualcomm + hyper scalers who want custom chips (Microsoft/Amazon). I can even seen Apple outsourcing some small chips in few years (big NPU outside main board or maybe 5/6G custom chips etc.)
US based chip designers. But the question i think more relevant is, are TSMC and Intel both needed if western semi conductor lose the Chinese market. Because no one has the need or the scale of China.
My bet is that TSMC will go down and the talent will either go to the mainland or the US.
There is no alternative to the Chinese market, maybe in 30~40 years India might approach the current Chinese market.
The rest of the world is either way too small or not developed enough to fill that hole.
The answer will be: All of them, plus Microsoft, Amazon, Google.
TSMC and Samsung can’t meet the demand of those companies.
If Intel can be TSMC’s customer then surely AMD can be Intel’s customer, so is Apple. Intel’s foundry business is structured to be separated from its processor business
I listed TSMC's biggest customers - and really AMD using Intel foundries? You cannot be serious.
The assumption is that there is going to be a lot more demand. Even after cutting China out which is like 1/3 of global demand. The assumption is that will be driven by AI, mostly in data centers.
Could be. Otherwise Intel foundry services will face an uphill battle vs. TSMC.
Again, Intel is a fierce competitor to TSMC, yet they are also TSMC’s customer. AMD will be the same to Intel if they can’t secure enough volume from TSMC.
TSMC’s revenue is like 70 times of Intel’s foundry business. Intel only plans to leapfrog Samsung by the end of this decade. What Intel aim to lead is the process. They plan to introduce 18A by the end of this year, followed by 14A.
China will not be cut off from the global market, only at the very high end. Nvidia just recently showcase their latest chips to Chinese market. They will continue to be a main driving force along with the US.
Intel is a competitor, but not in the same niche. Intel isn't sharing their foundry designs or 18A information with TSMC when they get chips made. AMD will never outsource to Intel...they would be basically giving the keys to the kingdom by doing so. TSMC doesn't have competitors at the chip design level...thats what makes them a perfect foundry.
> AMD will never outsource to Intel...they would be basically giving the keys to the kingdom by doing so.
They will if the alternative is that they lose customers. It’s not like they have a lot of options. Also they can use Intel for less advanced chips.
Intel knows full well that their chip competitors will be skeptical. That’s why they announced today that the company will be split into 2 distinct groups - Foundry and Product.
Microsoft and ARM join Intel on stage at their foundry event. The chips they have Intel to make are definitely competitors to Intel’s x86 and GPU businesses. That’s what AMD will do unless they get all they want from TSMC or Samsung.
Basically yes, but this is the exact reason Apple got away from Samsung making their chips. TSMC is a neutral party with reasons to keep designs secret from other customers. Intel and Samsung have competing products on the market so why would you t
But Intel pretty much bet everything AI on Falcon Shores (2025). If its crumby or late, I think it will be difficult for them to catch up. They'll have inference hardware in laptops, sure, but still...
You’d think that “Intel 4” refers to 4nm, and “Intel 7” refers to 7nm, but Anandtech doesn’t think so: https://www.anandtech.com/show/17448/intel-4-process-node-in... Quote: “Previously known as Intel’s 7nm process, Intel 4 is Intel’s first time using EUV lithography for their chips.”
This doesn't mean anything if you think deeper. What if the original "7 nm" name was inaccurate and "4" is more representative of the process's performance?
What, and do hear me out on this, Intel 4 is just the invention of Intel’s marketing department aimed to confuse people who don’t know what they’re talking about? Do you think that’s more likely perhaps? Notice how strenuously they avoid any mention of the process node in all their materials.
I mostly agree, but if TSMC and Samsung are "lying" about nanometers... what is Intel supposed to do about that? Just keep punching themselves in the face by underselling their processes?
Well you mentioned their latest and greatest...which also uses three of TSMC's N5 chips in it. So they may have solved that 2021 problem with 7nm tech, but they are still relying heavily on TSMC for their best chips right now.
