Rumor: TSMC to increase 12-inch wafer prices by 25% by end of the year.

[Zodiark1593]

16 minutes ago, Orangeator said:

We simply need more competition. I understand that the barrier to entry is extremely high when it comes to fabs. But that's no excuse considering the level of demand and dependence the entire world has on these products. Chip production needs to be a national interest of the US government, and having more than just one fab here is essential. 

Fabs by themselves aren’t the problem, so much as independently developing comparable technologies to the beat TSMC and Samsung have to offer. Outside fab construction costs, considerable R&D time and costs would also be necessary to reach parity. Undoubtedly, there’s some crucial confidential info that TSMC and Samsung closely guard, necessitating independent R&D. 

[Kadzo]

6 hours ago, CarlBar said:

 have to go through the whole mess of getting planning permission and before that they have to work out where would be a good place to put it based on local transport capabilities, potentially trainable extra workers, costs to operate e.t.c.

 

Second, Foundries as also pointed out above need equipment to go in them. More than that because of the build time if it's your highest performance node your not putting in the same equipment your using right now, your putting in equipment that you expect to be using in several years for a process node thats going to be still in development. Thats got some extra risks associated with it as if you need to modify your process specs late on your going to have to modify all of that new hardware thats never made any money.

 

Third, Different computer bits need different processes. Those used for RAM or FLASH are usless for making high performance CPU's and GPU's. The High performance compute shortage outside of intel is a covid centric thing. And thats because demand went up by a lot more than expected in a very short time.

 

Earliest TSMC could have started discussing this internally was this time last year, more likely last few months of 2020. If they decide to expand in response we probably won't see ground being dug for another year or two and then another 2+ years for it to be completed. Your talking 3+ years before any response to events that started middle of last year happens. Thats what happens when just in time manufacturing using something that takes a while to expand infrastructure on runs into the unexpected.

Don't forget the creation of supply chains, additional taxes created if you are building in a different country, creation of logistics chains. JIT is a horror show if you go deep inside enough.

 

Besides that even if the build a new plant and it starts producing in 3+ years then the demand can go low again so they would't fulfil entire capacities of the new plant.

[Brooksie359]

11 hours ago, TetraSky said:

I'm actually surprised they were paying the employees at all for those extra hours, even if it's not as overtime.

It's not that unusual to be treated like a slave in that part of the world when it comes to your job.

https://www.taipeitimes.com/News/taiwan/archives/2017/08/20/2003676852

This is not isolated to only Taiwan, too.

 

That said, what I am not surprised at, is this price hike.

When demand becomes higher than the supply... Shit goes up.

Some companies could totally absorb it for their customers due to how high their profit margin is already on their products (ex: 38% gross, 21% net profits for Apple). But why would they do that if they can just charge people more money and people won't have any choices but to buy from them anyway if they want the latest tech toy of the year.

To be fair if you are salaried you won't necessarily get paid extra for overtime even in the US. Granted this is exempt employees vs nonexempt employees so its a bit more complicated than just being salaried vs hourly. I do agree that it makes sense for TSMC to not invest in new fabs in a certain sense as they are seeing guaranteed profits and they are constantly at full capacity which is a good thing in a certain sense. The only downside i see is that companies may opt for other fabs as a result of not trusting they will get enough supply from TSMC. 

[Video Beagle]

14 hours ago, BuckGup said:

I feel the problem was a long time coming everyone saw.

You say "problem"...they say "opportunity".

[Rauten]

Oh joy; just when you think it can't possibly get worse, Murphy rears his ugly head.

We really need Intel and Samsung to get those new fabs running ASAP, but by then it's gonna be too late anyway...

 

Oh well, better prepare to pay up to 500€ for an i5/r5 equivalent next year! 

[Donut417]

18 hours ago, BuckGup said:

So are foundries just so advanced only a few know how to do it otherwise I don't see why we can't open more fabs? The issue affects everyone on Earth so surely they could pool money together to make more fabs

Both Samsung and TSMC are building more Fabs in the US If I recall correctly. The issue is it takes a lot of money to build one. Then it takes years to construct. So you literally are spending a shit ton of money and probably waiting at least 2 or so years before you can even start making money with it. Not to mention the amount of time it takes to see a return on your investment. 

 

So the 25% increase will help them recoup the cost of the Fab they are building quicker. Plus it might help generate more cash where they might consider building a few more. 

[Doobeedoo]

:<

[Bombastinator]

On 3/29/2021 at 11:58 AM, BuckGup said:

So are foundries just so advanced only a few know how to do it otherwise I don't see why we can't open more fabs? The issue affects everyone on Earth so surely they could pool money together to make more fabs

Yes.  There are lots and lots of fabs in the US. They have much much larger nodes though. Iirc I read one as having 40nm recently. 

[BuckGup]

1 hour ago, Bombastinator said:

Yes.  There are lots and lots of fabs in the US. They have much much larger nodes though. Iirc I read one as having 40nm recently. 

I guess fabs that can produce whats currently needed 

[Kadzo]

20 hours ago, Brooksie359 said:

 I do agree that it makes sense for TSMC to not invest in new fabs in a certain sense as they are seeing guaranteed profits and they are constantly at full capacity which is a good thing in a certain sense. The only downside i see is that companies may opt for other fabs as a result of not trusting they will get enough supply from TSMC. 

it is not so much of a downside because they as a supplier are not a shop that you go inside and just sell you what you want, they create obligatory contracts for year even more then a year of "reserved" stock.

So they now exactly how much they need to produce, any over flow over their 100% capacities can go to their "competition" (i am saying like that because they usually work together with the competition)

 

[poochyena]

On 3/29/2021 at 12:08 PM, BuckGup said:

But supply issues have existed long before Corona.

They really didn't though outside of very short term issues.

On 3/29/2021 at 12:08 PM, BuckGup said:

Remember the price of RAM and flash storage when there was a dimm shortage? 

That was due to bad foresight. They chose to not make as much of that since they under estimated the demand. This is totally different, they aren't choosing to produce less CPUs and GPUs.

[Kisai]

On 3/29/2021 at 9:58 AM, BuckGup said:

So are foundries just so advanced only a few know how to do it otherwise I don't see why we can't open more fabs? The issue affects everyone on Earth so surely they could pool money together to make more fabs

It's more like they're just so expensive that a new company could never do it without state backing.

 

Only existing companies with billions of dollars in profits per year could open a new fab, and it would take a significant amount of time to recoup that cost. Intel's sitting on 14nm for 7 years was exactly the wrong move, and might have worked better for them had AMD owned their own fab and was lagging behind as well.

 

At any rate, the best solution may ultimately require US/Canada/UK/AU , EU, and JP/TW/KR to mandate that at their own region must be capable of producing entire computers domestically, if a disruption in the supply chain like what happened last year ends up with an electronics drought.

 

Like, the real problem with globalization is that a lot of domestic capacity for things gets destroyed in the name of saving costs and outsourcing, and then when all the places you can outsource too are full, or suffer natural disasters, the entire supply chain is disrupted and everything from cars to toilet paper end up in the hands of scalpers.

 

You know, literal scifi dystopian silly crap. It's one thing to reduce over-supply, because it removes waste from the system, but if you reduce your supply chain to just barely more than "just in time", then a lot of stuff just gets wasted if the supply chain is disrupted.

 

Anyhow, nobody says we need to move to 7, 5, or 3nm. We could just call it quits now and only expand existing capacity, but then computer performance will be frozen from here on. It won't be possible to iterate more performance from a die shrink without creating some kind of exotic material that has to be 3d-printed one-by-one at the atomic level. If you've ever seen what cpu transistors look like under a microscope, they tend to look very rough.