TSMC cancels chip price cuts and promises $100B investment surge • Hacker News Board

Re: TSMC cancels chip price cuts and promises $100B investment surge

#81

Post by cwhiz » Thu, Apr 01, 2021, 1:06 PM UTC

nindalf wrote: post #65

cwhiz wrote: post #60

Earlier quoted context omitted.

If the west can’t supply China, the west should ban Chinese imports.

You assume there would be malice involved. Even today TSMC prioritises some customers (Apple) over others (car manufacturers). In a future Taiwan that is a part of China, TSMC might have a new pecking order where Huawei is at the top and now Apple is chip constrained. You'd ban all Chinese imports unless one Chinese company rewrites it's contracts? Of course not.

With China there will unequivocally be malice.

Re: TSMC cancels chip price cuts and promises $100B investment surge

#82

Post by foobarian » Thu, Apr 01, 2021, 1:07 PM UTC

Kliment wrote: post #73

ksec wrote: post #47

1. TSMC were spending ~$30B per year on capital expenditure already. 2. Since leading edge node is forever increasing in cost, the next 3 years, i.e 3nm in 2022 and 2nm in 2024 are expected to be higher. ~$100B investment aligned with their initial plan / trend / target anyway. 3. So really the major news is stopping ( or to be precise, delaying ) price reduction. Which is unusual but understandable given the current…

Every single fabless semiconductor designer failed to predict demand because their customers lied to them. The car industry pulled a really dick move last year, and then pulled an even more dick move in the opposite direction, and now everyone is screwed. Back in early 2020 the car manufacturers decided that demand for cars would go down, and because they have a religious aversion to keeping any stock, cancelled lots…

Just wanted to say that I really appreciate your comment.

Re: TSMC cancels chip price cuts and promises $100B investment surge

#83

Post by foobarian » Thu, Apr 01, 2021, 1:10 PM UTC

User23 wrote: post #75

hyko wrote: post #62

Earlier quoted context omitted.

My first reaction to this plan is that it’s for the birds. The government would be better off just building a fab themselves. The raw materials aren’t that hard to get hold of; integrating consumer electronics into military systems would likely take just as long, if not longer (with all sorts of other negative effects on quality and security). I guess the analogy is with scrap metal drives in WWII, but this situation…

The only chance the USA has in a hot war for Taiwan is using nukes to which the PRC would respond in kind. That would be even worse for semiconductor availability than reunification. So let’s cool it with the macho idiocy and instead focus on diversifying the semiconductor supply chain to areas that aren’t inevitably going to fall back under Chinese control.

You should look at the stockpile sizes. Unless Russia gets involved it would not be a balanced situation at all.

Re: TSMC cancels chip price cuts and promises $100B investment surge

#84

Post by lotsofpulp » Thu, Apr 01, 2021, 1:15 PM UTC

Kliment wrote: post #73

ksec wrote: post #47

1. TSMC were spending ~$30B per year on capital expenditure already. 2. Since leading edge node is forever increasing in cost, the next 3 years, i.e 3nm in 2022 and 2nm in 2024 are expected to be higher. ~$100B investment aligned with their initial plan / trend / target anyway. 3. So really the major news is stopping ( or to be precise, delaying ) price reduction. Which is unusual but understandable given the current…

Every single fabless semiconductor designer failed to predict demand because their customers lied to them. The car industry pulled a really dick move last year, and then pulled an even more dick move in the opposite direction, and now everyone is screwed. Back in early 2020 the car manufacturers decided that demand for cars would go down, and because they have a religious aversion to keeping any stock, cancelled lots…

>However, the car industry got it badly wrong

You write at the beginning and end of your post that the car industry lied to their vendors, but then you also write they got it badly wrong, which means they were incorrect about their projections of demand. Surely it can't be both, and it sounds like the car industry did not lie, but simply were wrong about their predictions for the future.

Or am I misunderstanding?

Nevertheless, thanks for providing context for the whole situation.

Re: TSMC cancels chip price cuts and promises $100B investment surge

#85

Post by hyko » Thu, Apr 01, 2021, 1:18 PM UTC

Tade0 wrote: post #68

hyko wrote: post #62

Earlier quoted context omitted.

My first reaction to this plan is that it’s for the birds. The government would be better off just building a fab themselves. The raw materials aren’t that hard to get hold of; integrating consumer electronics into military systems would likely take just as long, if not longer (with all sorts of other negative effects on quality and security). I guess the analogy is with scrap metal drives in WWII, but this situation…

IIRC the US navy is currently using XBox controllers: https://www.theverge.com/2017/9/19/16333376/us-navy-military... Of course this is a far cry from ripping a SoC from a smartphone and putting it into e.g a bomber drone, but I assume there's much more being done - just not published.

Wow. As long as they’re not using joy cons I guess!

Re: TSMC cancels chip price cuts and promises $100B investment surge

#86

Post by swalsh » Thu, Apr 01, 2021, 1:22 PM UTC

ksec wrote: post #47

1. TSMC were spending ~$30B per year on capital expenditure already. 2. Since leading edge node is forever increasing in cost, the next 3 years, i.e 3nm in 2022 and 2nm in 2024 are expected to be higher. ~$100B investment aligned with their initial plan / trend / target anyway. 3. So really the major news is stopping ( or to be precise, delaying ) price reduction. Which is unusual but understandable given the current…

I find it concerning how few companies exist to do this work. I really hope Intel's new foundry business is successful.

Re: TSMC cancels chip price cuts and promises $100B investment surge

#87

Post by bkor » Thu, Apr 01, 2021, 1:24 PM UTC

kyrra wrote: post #80

Kliment wrote: post #73

Earlier quoted context omitted.

Every single fabless semiconductor designer failed to predict demand because their customers lied to them. The car industry pulled a really dick move last year, and then pulled an even more dick move in the opposite direction, and now everyone is screwed. Back in early 2020 the car manufacturers decided that demand for cars would go down, and because they have a religious aversion to keeping any stock, cancelled lots…

Just in time delivery has its downfalls when vendors have issues, but this is a known trade-off to that model. If a company keeps inventory on hand, then they have the worry of owning excess parts that they can never use and is a sink cost later. So these companies can lose money with either, it just depends on the circumstances that cause it. I'd be interested to learn more about the order cancellation you were sayi…

> Shouldn't contracts prevent that sort of behavior (without proper compensation)?

That depends on how big the customer/order is, no? If (as a manufacturer) you could get away with not having it in a contract, why include it?

Similarly, instead of actually cancelling they could also "lie". Say that there are capacity issues, etc. That the capacity issue is mostly because they resold the existing manufacturing capacity, is left out.

> Just in time delivery

The well-known example of this is Toyota. Interestingly, they've started ensuring they do have stocks. See e.g. https://www.reuters.com/article/us-japan-fukushima-anniversa.... I found that rather interesting.

Re: TSMC cancels chip price cuts and promises $100B investment surge

#88

Post by baybal2 » Thu, Apr 01, 2021, 1:26 PM UTC

Kliment wrote: post #73

ksec wrote: post #47

1. TSMC were spending ~$30B per year on capital expenditure already. 2. Since leading edge node is forever increasing in cost, the next 3 years, i.e 3nm in 2022 and 2nm in 2024 are expected to be higher. ~$100B investment aligned with their initial plan / trend / target anyway. 3. So really the major news is stopping ( or to be precise, delaying ) price reduction. Which is unusual but understandable given the current…

Every single fabless semiconductor designer failed to predict demand because their customers lied to them. The car industry pulled a really dick move last year, and then pulled an even more dick move in the opposite direction, and now everyone is screwed. Back in early 2020 the car manufacturers decided that demand for cars would go down, and because they have a religious aversion to keeping any stock, cancelled lots…

The thing about a car is that BOMs are monstrously large.

If you have 1000 ICs in a car, and one of them is missing, that's a $100,000 car you can't sell.

Car industry haphazardly buying out last stocks of ICs will not help them work around that "one missing chip" problem, and production lines are potentially stuck for many more months.

The panic was undue, well, or best say of no use. The are screwed, but its of no use for them to hope for some desperate moves improving the situation now if they can't assure 100% availability of all, and every component on their BOM.

I have few buddies who went to work on an ECU for MTU/Siemens. They ran exactly into that when their companies went for a complete redesign of their ECU to run on consumer STM32. They had hopes of that such old 180nm-130nm CMOS chips easily tolerating around 130C°, they did tests, it worked fine, and then they ran into undocumented high temperature protection kicking in on a slightly newer chip revision, but they already bough few millions of them, and other ICs for a new design in inventories.

Re: TSMC cancels chip price cuts and promises $100B investment surge

#89

Post by Kliment » Thu, Apr 01, 2021, 1:27 PM UTC

lotsofpulp wrote: post #84

Kliment wrote: post #73

Earlier quoted context omitted.

Every single fabless semiconductor designer failed to predict demand because their customers lied to them. The car industry pulled a really dick move last year, and then pulled an even more dick move in the opposite direction, and now everyone is screwed. Back in early 2020 the car manufacturers decided that demand for cars would go down, and because they have a religious aversion to keeping any stock, cancelled lots…

>However, the car industry got it badly wrong You write at the beginning and end of your post that the car industry lied to their vendors, but then you also write they got it badly wrong, which means they were incorrect about their projections of demand. Surely it can't be both, and it sounds like the car industry did not lie, but simply were wrong about their predictions for the future. Or am I misunderstanding? Nev…

The car industry got their demand planning wrong, so they lied to their vendors that they wouldn't need that inventory. They then turned around and went "hey actually screw that we want the inventory after all", making their previous promise that they wouldn't buy it a lie.

Re: TSMC cancels chip price cuts and promises $100B investment surge

#90

Post by ethbr0 » Thu, Apr 01, 2021, 1:32 PM UTC

bkor wrote: post #87

kyrra wrote: post #80

Earlier quoted context omitted.

Just in time delivery has its downfalls when vendors have issues, but this is a known trade-off to that model. If a company keeps inventory on hand, then they have the worry of owning excess parts that they can never use and is a sink cost later. So these companies can lose money with either, it just depends on the circumstances that cause it. I'd be interested to learn more about the order cancellation you were sayi…

> Shouldn't contracts prevent that sort of behavior (without proper compensation)? That depends on how big the customer/order is, no? If (as a manufacturer) you could get away with not having it in a contract, why include it? Similarly, instead of actually cancelling they could also "lie". Say that there are capacity issues, etc. That the capacity issue is mostly because they resold the existing manufacturing capacit…

As with all things, an optimization (e.g. agile, JIT/lean manufacturing) is predicated on certain assumptions. In this instance, "we exist in an ecosystem where our suppliers can rapidly respond to volatile demand from us."

If the assumptions fail, then it's not a failure of the optimization, but an incorrect application of it. Maybe we don't currently live in a world in which elastic semiconductor availability at scale can be assumed.