They depend on ASML lithography machines, right? Intel, Samsung and other foundries could/do also buy ASML's machines, so what gives TSMC their advantage?
Ask HN: Why is TSMC so competitive in semiconductor fabrication?
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Re: Ask HN: Why is TSMC so competitive in semiconductor fabrication?
#2It’s not how big your machine is, it’s how you use it. TSMC has the know-how.
Re: Ask HN: Why is TSMC so competitive in semiconductor fabrication?
#3Semiconductor industry has the deepest and most complex value chain in the economy.
TSMC has always been pure fab company and it pays off now. Samsung and Intel are also in chip design business and do other things. They are less focused. TSMC's lead is not guaranteed. Any new technology node can fail and remove them from competition if they make wrong choices.
I'm not exaggerating when I say that designing a new technology node for mass production is like a moon program. TSMC designs new node every few years, builds a fabs that cost 20+ billion. ASML machines are the most expensive tooling there but they are just part of the whole.
Intel and Samsung are almost as good, but small differences have huge impact in the final result and timing. Small percentages in final yield can make a difference.
Re: Ask HN: Why is TSMC so competitive in semiconductor fabrication?
#4Semiconductor industry has the deepest and most complex value chain in the economy. TSMC has always been pure fab company and it pays off now. Samsung and Intel are also in chip design business and do other things. They are less focused. TSMC's lead is not guaranteed. Any new technology node can fail and remove them from competition if they make wrong choices. I'm not exaggerating when I say that designing a new tech…
What is a node in this context and what does designing a new node entail? Does this design process mean TSMC can do something with ASML machines that another company with the same machine couldn't do?
Re: Ask HN: Why is TSMC so competitive in semiconductor fabrication?
#5Semiconductor industry has the deepest and most complex value chain in the economy. TSMC has always been pure fab company and it pays off now. Samsung and Intel are also in chip design business and do other things. They are less focused. TSMC's lead is not guaranteed. Any new technology node can fail and remove them from competition if they make wrong choices. I'm not exaggerating when I say that designing a new tech…
What is a node in this context and what does designing a new node entail? Does this design process mean TSMC can do something with ASML machines that another company with the same machine couldn't do?
Re: Ask HN: Why is TSMC so competitive in semiconductor fabrication?
#6The short answer is during a time of massive profits of semi companies, most cashed out. One (TSMC) has kept reinvesting gains into R&D for the last 20 years. Lithography via ASML is the cutting edge advance, but there are many other small details too. Both in the technology itself but also in the complexity of integrating that technology to work together in one process.
Re: Ask HN: Why is TSMC so competitive in semiconductor fabrication?
#7The short answer is during a time of massive profits of semi companies, most cashed out. One (TSMC) has kept reinvesting gains into R&D for the last 20 years. Lithography via ASML is the cutting edge advance, but there are many other small details too. Both in the technology itself but also in the complexity of integrating that technology to work together in one process.
I think that one of the greatest advantages that Korean, Chinese, and Taiwanese companies have is that most of them seem to be somewhat immune to Harvard Business School ideas, and Jack Welch was never worshipped as he was in the West.
Keeping the bean counters under leash is good for building long-term value.
Re: Ask HN: Why is TSMC so competitive in semiconductor fabrication?
#8The short answer is during a time of massive profits of semi companies, most cashed out. One (TSMC) has kept reinvesting gains into R&D for the last 20 years. Lithography via ASML is the cutting edge advance, but there are many other small details too. Both in the technology itself but also in the complexity of integrating that technology to work together in one process.
I think that one of the greatest advantages that Korean, Chinese, and Taiwanese companies have is that most of them seem to be somewhat immune to Harvard Business School ideas, and Jack Welch was never worshipped as he was in the West. Keeping the bean counters under leash is good for building long-term value.
What's the difference between HBS ideas and these Asian companies? I have no background in economics so idk. Like what advantages do both have?
From this comment it reads like HBS has no merit at all but I'd imagine that's not the entire picture
Re: Ask HN: Why is TSMC so competitive in semiconductor fabrication?
#9I highly recommend browsing through the videos in Asianometrys channel if you want easily digestible summaries on this topic: https://youtube.com/@Asianometry
TSMC analysis playlist: https://youtube.com/playlist?list=PLKtxx9TnH76SRC7ZbOu2Nsg5m...
Re: Ask HN: Why is TSMC so competitive in semiconductor fabrication?
#10Earlier quoted context omitted.
I think that one of the greatest advantages that Korean, Chinese, and Taiwanese companies have is that most of them seem to be somewhat immune to Harvard Business School ideas, and Jack Welch was never worshipped as he was in the West. Keeping the bean counters under leash is good for building long-term value.
What's the difference between HBS ideas and these Asian companies? I have no background in economics so idk. Like what advantages do both have? From this comment it reads like HBS has no merit at all but I'd imagine that's not the entire picture
Business school type leadership rarely works in high tech. Important decisions are technological decisions.
It's easier to pick senior engineers from the industry and give them business education than vice versa. There is also special field called industrial engineering that trains people to manage and lead industrial processes.