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0 pointsalephnerd1y ago0 comments

They both contract TSMC to fabricate their chips.

The actual design and R&D is still done by Nvidia, Cerebras, AMD, Groq, etc.

Think of TSMC like Kinko's - they do printing and fabrication which is very low margins.

The main PMF for Cerebras is in simulations, drug discovery, and ofc ML.

As I've mentioned before on HN, Public-Private Drug Discovery and NatLab research has been a major driver for HPC over the past 20 years.

0 comments

est311y ago

TSMC has a market cap of 0.9T USD. It would be the 7 largest US company by market cap if it were one. Manufacturing chips is extremely profitable, at least in the current climate. It used to be that software is more profitable than hardware, which is more commoditized, but AI gave hardware companies a renaissance of sorts.

It's not a simple process at all but requires a lot of engineering and engineers to do it.

https://companiesmarketcap.com/usa/largest-companies-in-the-... https://companiesmarketcap.com/tsmc/marketcap/

alephnerdOP1y ago

> Manufacturing chips is extremely profitable

It only became profitable NOW in the last 2-3 years.

Before that, foundry after foundry was shutting down or merging.

TSMC, UMC, Samsung, Intel Foundry Services, and GloFlo are the last men standing after the severe contraction in the foundry model in the 2000s-2010s due to it's extremely high upfront costs and lack of moat to prevent commodification.

extesy1y ago

TSMC margins are over 30% and growing [1] - that's very far from "low".

[1] https://www.macrotrends.net/stocks/charts/TSM/taiwan-semicon...

alephnerdOP1y ago

30% net due to a near monopoly and a recent upswing due to Nvidia.

Almost every other foundry system died because of low net margins.

Software (and fabless hardware like chip design) is expected to have 60-70% gross margins or the ability to reach that.

Semiconductors is part of TMT just like Software or Telecom, and this has an impact on available liquidity.

This is why TSMC is heavily subsidized by the Taiwanese government.

extesy1y ago

TSMC is neither software nor fabless. I'm not sure we are talking about the same company, there seems to be some disconnect here. For hardware business 30% margins are high, Apple is one of the most famous exceptions.

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typon1y ago

Kinko's is not the pinnacle of human engineering - TSMC is. A slight difference there.

Cyph0n1y ago

> Think of TSMC like Kinko’s

What an amazingly reductive analogy :)

j / k navigate · click thread line to collapse

0 pointsalephnerd1y ago0 comments

They both contract TSMC to fabricate their chips.

The actual design and R&D is still done by Nvidia, Cerebras, AMD, Groq, etc.

Think of TSMC like Kinko's - they do printing and fabrication which is very low margins.

The main PMF for Cerebras is in simulations, drug discovery, and ofc ML.

As I've mentioned before on HN, Public-Private Drug Discovery and NatLab research has been a major driver for HPC over the past 20 years.

0 comments

est311y ago

It's not a simple process at all but requires a lot of engineering and engineers to do it.

https://companiesmarketcap.com/usa/largest-companies-in-the-... https://companiesmarketcap.com/tsmc/marketcap/

alephnerdOP1y ago

> Manufacturing chips is extremely profitable

It only became profitable NOW in the last 2-3 years.

Before that, foundry after foundry was shutting down or merging.

extesy1y ago

TSMC margins are over 30% and growing [1] - that's very far from "low".

[1] https://www.macrotrends.net/stocks/charts/TSM/taiwan-semicon...

alephnerdOP1y ago

30% net due to a near monopoly and a recent upswing due to Nvidia.

Almost every other foundry system died because of low net margins.

Software (and fabless hardware like chip design) is expected to have 60-70% gross margins or the ability to reach that.

Semiconductors is part of TMT just like Software or Telecom, and this has an impact on available liquidity.

This is why TSMC is heavily subsidized by the Taiwanese government.

extesy1y ago

1 more reply

typon1y ago

Kinko's is not the pinnacle of human engineering - TSMC is. A slight difference there.

Cyph0n1y ago

> Think of TSMC like Kinko’s

What an amazingly reductive analogy :)

j / k navigate · click thread line to collapse