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

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

#251

Post by ethbr0 »

perl4ever wrote: post #245
lenkite wrote: post #141

Earlier quoted context omitted.

When I first studied about JIT in college, I asked my professor: Doesn't this manufacturing methodology lack fault-tolerance and isn't it deeply susceptible to natural calamities or economic failures ? He replied that it was proven, adaptable and reliable. Other suppliers would come in if some suppliers failed. JIT (aka lean manufacturing) today has now permeated pretty much most of the global supply chain. Human civ…

>Human civilisation is far more fragile at the moment than in the last few. hundred years. It was less fragile when there were famines all the time? I don't understand how people can repeat this rhetoric when it seems obvious to me that however fragile it is, it's less so than in all of history. Even if things rapidly get much, much worse, it wouldn't change my opinion. How do you think we would determine which is th…

There's a distinction between technology level and time disposition, I think.

Compared to a self-sufficient small-scale agrarian society (say, 10th century Europe), what would have caused famine in their time would not for us.

At the same time, we allocate our time differently than they did -- few of us actually farm for ourselves.

If we allocated time more similarly + applied current technology, it'd be pretty hard for people to starve (between improved long term food storage, GMO crop yields, and environment mitigation).

Side note: the always educational Bret Devereaux lays out a solid argument for why famines were the result of an underdeveloped monetary and trade system, that led to fragile choices being optimal for individual farmers. [0]

[0] see "Risk Control" section https://acoup.blog/2020/07/24/collections-bread-how-did-they...

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

#252

Post by thu2111 »

Kliment wrote: post #89
lotsofpulp wrote: post #84

Earlier quoted context omitted.

>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.

The most surprising thing about this story is the apparently massive number of people who didn't have cars, relied entirely on public transport and then decided to buy cars? How certain are you of that analysis? Surely that is a rather rare case, as the typical public-transit-only person tends to live in a city where parking space is at a premium. Whole tower blocks cannot easily switch from transit to cars overnight just because they prefer it.

Or is this the mass exodus from American cities I keep reading about? They're buying cars because they're moving from NY to Florida, that sort of thing?

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

#253

Post by brianwawok »

gumby wrote: post #243
pas wrote: post #238

Earlier quoted context omitted.

If they have so much cash and margin, why don't they keep more inventory instead of all these supply chain black magic?

Better use of capital and better supplier flexibility (why consume your suppliers’ capacity on stuff you don’t need when you could switch them to the next gen thing you need?). You could think of it as avoiding bufferbloat in the physical domain.

Also refreshes are real annoying/unprofitable when you have millions of old tech sitting in warehouses. Apple has pretty good science on the sneak peak / release / fulfill of new tech. You can basically get day1 or at least week1 release of any new product.

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

#254

Post by canadianfella »

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…

What is MSM media?

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

#255

Post by LatteLazy »

carlmr wrote: post #4
LatteLazy wrote: post #2

Careful setting next year's quotas based on last year's shortages...

True, but where do you see demand dropping off? I would actually assume demand will go up even more, since the economy was slowed down due to the pandemic.

Honestly, I think it should already be dropping off.

Everyone, their kids and their pets has updated their electronics this year. That made sense as work/school from home was a thing. Now they have new electronics, and no need for additional electronics. Plus pretty soon things will reopen, and people will have opportunities to spend money on beer and restaurants and events.

Even if covid 2.0 launches this year, I already have a new ipad etc.

I think there'll be very low sales for most electronics for a while.

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

#256

Post by antiterra »

thu2111 wrote: post #252
Kliment wrote: post #89

Earlier quoted context omitted.

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.

The most surprising thing about this story is the apparently massive number of people who didn't have cars, relied entirely on public transport and then decided to buy cars? How certain are you of that analysis? Surely that is a rather rare case, as the typical public-transit-only person tends to live in a city where parking space is at a premium. Whole tower blocks cannot easily switch from transit to cars overnight…

It could be both. I imagine public transit is something people would try to avoid in a pandemic. When I lived in NYC I always thought about getting a car but it never made sense to spend that money. Bring in COVID and that might have done it.

My running theory is that manufacturers and retailers continue to underprice their goods,likely because they expect to eventually return to normal. This ends up effectively hiding inflation.

Many buyers have more discretionary cash than usual due to reduced spending from lockdowns. Demand is therefore increased on the things people can and want to buy. Then resellers/scalpers see the margin and buy up inventory to arbitrage. The scarcity compounds.

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

#257

Post by totalZero »

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…

You left out the AKM fire in October, which caused some essential production to get offloaded to Renesas. I think it may actually have gone to the same Naka plant that had the more recent fire.

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

#258

Post by ragnot »

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…

Really great comment...Appreciate when people do this.

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

#259

Post by qaqa »

How do you think the company will pay for this capital expenditure outlay – with cash, debt financing, sell additional shares of stock, something else?

What makes you think the company will use this method of financing?

Do you think this is the right approach? Why or why not?

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