What They Say
We don’t cover semiconductors in any real sense, but a few stories caught my eye over recent weeks and suggest a shift in the ‘tectonic plates’ of the industry.
- AMD had another strong quarter under the leadership of Lisa Su since 2014 with revenues of $3.85 billion and operating income of $924 million and net profit of $710 million. The computing and graphics segment was $2.25 billion. Our friend Dr Jon Peddie (whose firm made our graphic) is convinced that this is because AMD is a technology-driven firm.
- TSMC is considering the possibility of building a chip fab in Germany, to go with a possible fab in Japan and another definite one in the US. The firm is said to be working to try to get the costs of a Japanese fab down to the level it sees in Taiwan.
- Intel is looking at buying Global Foundries as it looks at trying to get back to the leading edge of chip production and establish itself as a foundry for other chip designers. (Pat Gelsinger opens up Intel’s checkbook for IDM 2.0)
What We Think
I wonder to what extent there is a logic in putting chip manufacturing around the world. In a business such as TV, with big heavy products that need a lot of shipping and may have different designs in different regions, putting manufacture close to customers makes sense. But chips are not regional, in general, and are high value and small and light so can easily be shipped. Further, for a company such as TSMC, as much as 70% of its output is for US customers. They control where they go when they are made, not TSMC. How does it help to have Nvidia chips made in Germany if that firm wants to ship them to a client elsewhere in the world? (BR)
