TSMC hikes chip prices up to 20% amid supply shortage

https://asia.nikkei.com/Business/Tech/Semiconductors/TSMC-hikes-chip-prices-up-to-20-amid-supply-shortage

630 589 5 years ago

asia.nikkei.com

akmarinov• 5 years ago

Wonder whether that impacts contracts like Apple's where they bought out all of the initial 3nm production that TSMC can manage more than a year ago.

If not that means that Apple will have a competitive advantage on price with other manufacturers that utilize TSMC.

johnnywasagood• 5 years ago

There are contracts for years and years ahead so I doubt current price changes will impact Apple or any other major client.

tyingq5• 5 years ago

Contracts are what they are, but they don't preclude discussions like "if we honor this as-is, it leads to a situation where we have no incentive to value you as a customer".

carl_dr• 5 years ago

MacRumors reports this may increase the price of the next iPhone - https://www.macrumors.com/2021/08/26/iphone-13-price-increas...

Lots of “reportedly”, “may”, “could” in there, of course.

(I’m linking that article since the original DigiTimes article is paywalled, and this article quotes from it.)

noisy_boy• 5 years ago

That might be the reason for rumours of higher storage (1tb). An excuse to charge 30% more to not only offset increased costs but to increase profit margins.

jjoonathan4• 5 years ago

Supply shortages are the excuse du jour, but so long as TSMC has the kingmaking node I expect it to become expensive. Very expensive. Expensive enough to move margin from the king their node made right back to TSMC.

skohan11• 5 years ago

As it should be. Without competition, and with demand outstripping supply, TSMC is free to find the price the market will bear.

da_chicken• 5 years ago

In the short term, sure, I'll buy that. In the long term, monopoly or near monopoly of any sort will turn toxic.

baybal23• 5 years ago

Silicon OPEC. I flouted the idea 10 years ago, and people were laughing.

skohan11• 5 years ago

It's a different case. TSMC isn't colluding with Samsung to limit the supply of silicon, they're simply succeeding where others have failed.

Retric• 5 years ago

This isn’t a price hike on their best node this is a price hike in their more mainstream nodes which have real competition.

jjoonathan4• 5 years ago

Sure, but it's not not a price hike on the leading node. Technically you are correct, the leading node price hikes will happen separately, behind closed doors, but it makes sense to talk about them here. There won't be a HN post about the non-public price hikes because, well, they aren't public.

markus_zhang2• 5 years ago

Wouldn't other people catch up quickly?

seibelj• 5 years ago

I was told the inflation was temporary. This doesn’t sound temporary!

wayoutthere• 5 years ago

The inflation has been there for a while now; wages have been artificially depressed for decades while the stock market was growing 15% a year. But when there’s inflation for the rich we call it an “asset bubble”.

qeternity6• 5 years ago

No. This is because inflation has a very specific meaning in economics. Inflation is not a synonym for “higher prices”.

pas• 5 years ago

How big chunk chips are of the median consumer's basket? Sure, everyone and their dog has smartphones, but not everyone has to buy the next-gen high-end ones. (Where the price increase happens.)

qeternity6• 5 years ago

Inflation is a rate of change, not an absolute change. When people say inflation is transitory, they mean that the rate of change is transitory (prices will stop going up). But the inflation that has occurred will not go away. You will not pay less when the inflation subsides. You will merely stop paying more.

This is what happens when you print $5T and refuse to let the economy go through any sort of healthy contraction.

sylens3• 5 years ago

Starting to get the feeling that the current prices for PC components are here to say.

simfoo• 5 years ago

My guess is also that the age of high-end graphics cards for 500€/$ has come to an end. Going to order a 3070 for 850€ now, after waiting for months

Thaxll• 5 years ago

Long gone are the days for decent $350 card.

sylens3• 5 years ago

I am in need of an upgrade but having a harder and harder time justifying the expense for what is a hobby.

I guess eventually my system will be old enough that I will be better off just ordering a prebuilt, where I'll get gouged a bit overall but not by some insane amount just for a GPU

thejosh• 5 years ago

I had a gutfeel around 3080 launch it was going to be big, so grabbed one on launch day (had to wait for months for the local store to have stock though..). Now seeing them 2x the price. Crazy times.

baybal23• 5 years ago

1080 GTXes bough and resold on ebays for tens of times are still going strong.

vardump• 5 years ago

This might be the start of the end of high-end PC gaming, unless prices get back to a more reasonable level. Consoles (and phones) are very competitive and cost significantly less.

Or perhaps it just causes the games to have lower performance requirements. Is integrated graphics the future of PC gaming?

sylens3• 5 years ago

I think it's interesting that we have three options now for sidestepping this by streaming games and yet none of them have made much of a dent.

Microsoft seems to have the best business model but you're stuck streaming the games on Game Pass, and their latency seems to be the worst in my experience.

Stadia seems to have the best tech in terms of latency, but the weird "it'll only work on these certain Chromecasts" launch situation put me off it for a bit, and then there's the business model - trusting Google to honor purchases on this service in perpetuity.

Luna is the one I haven't tried but seems to be going for an approach where they partner with publishers to sell catalog packs, even if they're not quite there yet.

dangus• 5 years ago

High-end PC gamers were always about money-is-no-object gaming. None of the tech they use has ever been strictly necessary.

The vast majority of gamers still use 1080p. More people login to Steam on a Mac than login to Steam with a 4K monitor attached.

Maybe the high-end is more expensive now, but you still see forums riddled with people paying $1000+ for cards. If nobody was paying for it the price would go back down. High-end PC gamers are the most price inelastic gamers on the market!

I'd say that integrated graphics are the present of PC gaming. eSports games, Minecraft, Fortnite and similar games dominate sales and play time, and they don't have any serious requirement for discrete graphics.

This is all to say that the high-end isn't going to just go away. The overall gaming market is bigger than ever, so high-end gaming along with other niches like VR are here to stay. These niches on their own are just large enough to support a variety of gaming markets, while in the past they might have been too obscure to warrant investment and development effort.

sofixa2• 5 years ago

Or is cloud gaming the future of gaming? GeForce Now and Stadia work fairly well and are price competitive with a modern powerful GPU.

ahtihn• 5 years ago

Consoles are significantly under-priced or there wouldn't be continual issues with them being out of stock and flipped by scalpers.

colinmhayes4• 5 years ago

Consoles are very competitive and cost significantly less.

If you can get one

cwkoss2• 5 years ago

I feel like high-end PC gaming, trying to maximize graphics of brand new titles has always been a silly dick-measuring competition.

For me the sweet spot of games is 2-8 years old. Reviews are out, so you can skip the crap. Patches have been released to fix bugs. And everything that has stood the test of time runs pretty well on low- to mid-tier hardware by now.

Dust off those games in your steam library that you never touched before.

philjohn• 5 years ago

That was my assumption - I managed to pick up a 3080 TI FE at MSRP in the UK a couple of weeks back. I would have gone for the 3080, better price/perf, but since the only ones available are AIB for the same price, or more, than the 3080 TI FE that made the decision for me.

mhh__• 5 years ago

Where from?

tyingq5• 5 years ago

The chip shortage is interesting to me. In that it seems to be mostly driven by bad forecasting both by clients and the foundries. But the foundries seem to get nothing but upside out of it. Perhaps it swings next time and there's excess capacity.

f6v2• 5 years ago

I wonder if food shortages are possible for the same reasons.

tonyedgecombe• 5 years ago

Food availability is driven by weather as much as anything. The North American wheat harvest has been poor this year so the price of wheat is rising around the world.

Geee• 5 years ago

Absolutely. If there's a fear of shortage, shortages will happen. There are also chain reactions to whole economy.

kzrdude• 5 years ago

I've heard the industry is full of exaggerated orders now to, everyone ordering more than they need, to see what they can get. Not a great way to have efficient trade.

tyingq5• 5 years ago

I wonder if TSMC made a trip out to OPEC to talk about history :)

asdfasgasdgasdg• 5 years ago

There are some reports of collapsing lumber prices, when everyone was talking about the sky falling and prices skyrocketing two months ago. https://financialpost.com/commodities/lumber-prices-collapse... So your idea that semiconductor prices might fall a lot in the future seems reasonable.

vbezhenar2• 5 years ago

I think that lumber storage is much more expensive compared to chips

pcurve2• 5 years ago

Yes, and they're stuck in a bad place. new fab takes years and costs 10 billion + to build...

https://www.extremetech.com/computing/322695-why-we-cant-bui...

AnimalMuppet3• 5 years ago

It will swing. It always swings. This isn't the first time this has happened.

People see these nice, tasty prices, and bring more capacity online. That takes time measured in quarters to years, but when it comes online, there are suddenly a lot more chips. Prices fall, but nobody will reduce output, because they have to pay for all this new capacity they just built.

It will come. It's going to be a rough year or two, though.

zz865• 5 years ago

"up to" makes the article worthless. To be fair I guess most chips usually fall in price over time.

laputan_machine3• 5 years ago

My PC is 11 years old this year. I've been waiting to upgrade it for 2 years but held off because GPU prices are utterly ridiculous.

I don't know who can afford these inflated prices, I was hoping things would settle but it doesn't appear to be the case.

temp8964• 5 years ago

Why not just purchase a used one on eBay?

laputan_machine3• 5 years ago

My current GPU is a used 980, it's mostly ok but it makes noises when doing certain tasks for some reason (like scrolling a browser window), I'm really not sure what causes it but it's put me off buying second hand cards, if it fails there's not much you can do to fix it

photon-torpedo2• 5 years ago

Prices for used GPUs are also inflated, though I think they have started to come down a bit. Once Ethereum moves to proof-of-stake (early 2022?) the market will probably get flooded with used GPUs.

yepthatsreality• 5 years ago

Try finding a PC starter bundle that includes a gpu from GameStop or some other retailer and you can find one for MSRP. The trade off is you’re buying other PC parts you may not need, for example a PSU.

csomar• 5 years ago

A modest new desktop will be definitively much better than anything you could have had 11 years ago.

Unless you are looking for high-end gaming, the most important parts will be your motherboard and SSD (nvme) speed. You could get all high-end components except for the graphic card, and just wait it out and replace it later when the prices come back.

nivenkos3• 5 years ago

Consider a pre-build PC, and then a Steam Deck or Xbox for gaming?

topspin3• 5 years ago

"I was hoping things would settle but it doesn't appear to be the case."

I've come to the conclusion that it's not going to 'settle' for a long time. Not until competition arrives from new foundries (several years out, although they _are_ being planned and built) and competition from Intel and their GPU platform appears and eventually becomes competitive. So your wait will be a couple years longer.

Proof Of Stake with Ethereum won't change anything. There are many other POW block chains around and people invested in GPUs farming will migrate, find profit and continue indulging their livelihoods. COVID isn't going away and isn't really causing any of this to begin with; it's just the go-to excuse for every complaint.

The real problem is obvious to me; the manufacturers, particularly those in Western countries, have been on a 20 year long lemming-like off-shoring race to Taiwan and S. Korea foundries and now there is a foundry oligopoly and competition no longer exists. Prices go up. Big surprise. And it won't return to 'normal' anytime soon.

With that in mind I bit the bullet ordered up all the parts for my new machine two weeks ago; $3k with a 3070 TI GPU. About a week after my order the the exact same GPU appeared in stock from the exact same reseller with a $200 price hike. The prices aren't going down. They're going up.

pbourke2• 5 years ago

Apple’s move, a decade ago, to control their own silicon seems quite prescient.

topspin3• 5 years ago

Update: that GPU is about $250 more now than what I paid on 8/6.

The worst part of all of this is now my PC is this precious asset. Used to be a GPU could die and "meh, whatever... could have used an update anyhow." Now I feel the need to pay for a 'protection' plan.

The good part of just paying the cost is now I'm no longer involved in 'newegg shuffle' nonsense or participating in 24/7 Live Stock Watcher videos on YouTube[1]. How messed up is that?

[1] 24/7 Live stock alert https://www.youtube.com/watch?v=GfyJ5XBchoQ

fomine3• 5 years ago

There are many PoW coins other than ETH, but is those price keep high? I think why ETH price high is it's widely used and funtional.

sva_• 5 years ago

Onboard graphic is pretty good these days, unless you plan to game high-end stuff. I'm actually using my 4790k's onboard graphic (2014) as a daily driver since I use my GPUs for compute only.

patrickwalton• 5 years ago

At the moment, we'd pay several X over price versus not being able to find needed ICs at all and having to redesign our satellite for ones that are available.

AnimalMuppet3• 5 years ago

I'm guessing, though, that semiconductors do not make up a large percentage of the cost of a satellite...

PragmaticPulp4• 5 years ago

Supply shortage is another way of saying demand excess. I don’t see much evidence that TSMC ever really slowed production, at least for their most advanced processes that are in high demand.

This is yet another way we’re all forced to pay the price for cryptocurrency. As long as GPUs are profitable for mining, they will be purchased and put to work. The saddest part is that each additional GPU added to the mining networks only makes the overall system less efficient. Mining difficulty is automatically adjusted upward to cancel out the additional computing power. The networks processed just as many transactions last year as they do now, but countless new GPUs have been added to the mining network due to the incentive structure of mining. It’s a race to the bottom, consuming ever more GPUs and energy until equilibrium is reached.

It’s frustrating to watch so much of the output of our most advanced chip manufacturing be diverted straight into making arbitrary proof-of-work systems less efficient so someone can capture incrementally more coins. And now we must all pay higher prices for everything.

officialchicken3• 5 years ago

I love how crypto has become easy-to-blame, when in fact datacenter after datacenter is being stuffed to the brim with chips for ML workloads. It's important to recognize when consumers are being squeezed by multiple market forces.

zpeti• 5 years ago

Not just ML, with everything moving to cloud services, while consumers still use phones plus laptops, the number of chips used per person more and more.

qeternity6• 5 years ago

Datacenters are not deploying consumer GPUs.

PragmaticPulp4• 5 years ago

The issue is that crypto mining is the only system designed to have negative marginal utility for each GPU consumed. It literally pays people to take energy and GPUs away from the open market for zero incremental gain to the network.

The difference is that each additional iPhone or ML accelerator or cloud server CPU provides incrementally more utility. More ML accelerators means more ML processing.

Proof-of-work mining is the only system designed to get less efficient with each additional unit of compute power. Add another GPU to the mining network and the network will automatically become less efficient. More GPUs doesn’t mean more transactions, but the system pays people to essentially burn these GPUs.

That’s the complaint. Not that chips are being used, but that the marginal output of each additional GPU is negative.

baybal23• 5 years ago

when in fact datacenter after datacenter is being stuffed to the brim with chips for ML workloads.

I don't see this at all. All these GPUs for non gaming use are a tiny drop in the ocean in comparison to the mainstream market.

Taek4• 5 years ago

It's mostly not ML either. There were production hiccups do to covid, increased consumer demand for chips due to covid, increased demand of mobile chips because the mobile industry is still massively growing, among other issues.

Crypto and ML are each rather small aspects of the issue at hand.

cletus• 5 years ago

I agree with this but it's even worse than that.

Estimates on Bitcoin energy usage put it at over 1TW now. I believe it was comparable to the energy consumption of Argentina.

Advocates will defend this by saying most energy usage is renewable. This conjures the image of someone with a bunch of solar panels but the reality is that it's primarily hydro power because that's the cheapest. Thing is, in regions with cheap hydro power, the miners can use so much power they end up making power more expensive for everyone.

I'd be more OK with this if crypto in fact solved a problem for most people. We should start by stopping calling them "currencies". They're not. They're assets. They lack all the useful properties of a currency (eg being massively deflationary)

The only thing cryptos really do is allow a temporary medium of exchange for traditional currencies. Some uses of this are entirely legitimate (eg escaping capital controls in certain currencies). Some are not (ie all the illegal usages).

I really wonder what happens to Bitcoin (or any PoW coin) when it no longer becomes economical to mine new coins. Does all the computing power just move on to the next coin? If so, won't this make the network vulnerable to attack? What is the incentive for people to contribute computing power without the prospect of economical new coins?

formerly_proven5• 5 years ago

Advocates will defend this by saying most energy usage is renewable.

Even if true (iirc there is a lot of doubt whether it is, see Iran), it's still moronic, because consuming renewable energy for shits and giggles obviously means that other energy demands are being met with your usual energy mix instead of that renewable energy that went into shits and giggles as assumed. In terms of net emissions it simply doesn't really matter whether you A) use non-renewable energy for BS or B) use renewable energy for BS, displacing other energy users to non-renewables.

The simple fact of the matter is that there is no free lunch and there is NO ecological way of randomly wasting energy.

tromp3• 5 years ago

Transaction fees will always make it economical to mine. They currently make up a small fraction of the block reward, but within a decade or two (5 block subsidy halvings), we can expect them to dominate. Btw, not all cryptocurrencies are deflationary [1].

[1] https://john-tromp.medium.com/a-case-for-using-soft-total-su...

DSingularity• 5 years ago

Pandora’s box has been opened. There will always be another coin to pump and dump and thus there will always be another coin to mine.

zsmi4• 5 years ago

Estimates on Bitcoin energy usage put it at over 1TW now. I believe it was comparable to the energy consumption of Argentina.

Looks like Argentina generates 131TWh annually as of 2016. The US was estimated to generate 4K TWh (a.k.a. 4PWh) in 2020.

"Argentina generates 131,910,280 MWh of electricity as of 2016 (covering 109% of its annual consumption needs)."

https://www.worldometers.info/electricity/argentina-electric...

Bitcoin energy usage is estimated at 100TWh annual, but the upper bound estimate is nearly 350TWh so it could be more than Argentina.

https://cbeci.org

zitterbewegung• 5 years ago

Actually Bitcoin and a lot of other coins have a coin limit (to prevent hyperinflation) and once the limit is set than the miners would make money on the transaction fee.

ConcernedCoder• 5 years ago

I'd be more OK with this if crypto in fact solved a problem for most people.

see: https://foldingathome.org/

opportune• 5 years ago

Ironically your “legitimate” example of escaping capital controls is illegal, which also makes it illegitimate according to your criteria.

nootropicat• 5 years ago

Mining is definitely renewable UNfriendly. Hardware is too expensive to turn it down at night, or when winds are weak. It's 24/7 constant demand, the worst possible for solar/wind.

It's indeed location independent, but that's more compatible with previously uneconomical fossil fuels (eg. methane in locations where transferring it out isn't economical).

sokoloff• 5 years ago

entirely legitimate (eg escaping capital controls in certain currencies). Some are not (ie all the illegal usages).

NB: You just listed only illegal usages and split them into two categories.

yarky• 5 years ago

in regions with cheap hydro power, the miners can use so much power they end up making power more expensive for everyone.

Not if there are laws to keep electricity price within a range. In places like Canada electricity is not necessarily traded in public for-profit markets, and must by law stay below inflation. I agree that in can be a problem in (most of?) the US.

I really wonder what happens to Bitcoin (or any PoW coin) when it no longer becomes economical to mine new coins.

That might be the equilibrium price, the electricity/production cost. Isn't the pow algorithm smart enough to keep rewarding at least above electricity cost?

jeffe2• 5 years ago

Let's not commit the fallacy of comparing unrelated big numbers. How does the energy and time per usd transferred compare between btc and the traditional banking system?

quantumBerry8• 5 years ago

The problem crypto solves is you can memorize a seed phrase and the government has nothing to seize, no bank account to freeze, no physical object to take. It's value that resides completely in your mind, but is recognized by others willing to pay a market rate for it.

You're joking yourself if you think government seizures are just; in the US asset forfeiture does not require even a criminal conviction. This is a problem for all people. Crypto solves a problem for all people.

adamc• 5 years ago

https://qz.com/2023032/how-much-energy-does-bitcoin-use/

Thanks for making me look at this. We should ban cryptocurrencies.

grkvlt• 5 years ago

Some uses of this are entirely legitimate (eg escaping capital controls in certain currencies). Some are not (ie all the illegal usages).

but wouldn't evading capital controls for a countries currency be illegal, too?

bingohbangoh• 5 years ago

What about the environmental practices of banking?

What about the cost of building all those buildings?

What about the cost of AC?

What about the cost of mining all those precious materials?

jdprgm2• 5 years ago

I really wonder what happens to Bitcoin (or any PoW coin) when it no longer becomes economical to mine new coins. Does all the computing power just move on to the next coin?

We will find out exactly this relatively soon when Ethereum moves to Eth2 and Proof of Stake.

mgraczyk2• 5 years ago

I agree that the externalities are still overwhelmingly negative, but one part you're missing is that cryptocurrencies act as a global reserve asset. Crypto is still tiny compared to other financial markets, but the existence of cryptocurrencies has probably reduced the volatility of other assets somewhat.

In the future, this effect will likely be more pronounced. It's an asset class that has some degree of independence from other asset classes, so it decreases the overall risk of the financial system.

908B64B197• 5 years ago

but the reality is that it's primarily hydro power because that's the cheapest. Thing is, in regions with cheap hydro power, the miners can use so much power they end up making power more expensive for everyone.

Err that depends.

The thing with dams is that the water can never rise above a certain level, else the structural stability of the dam is compromised. So often they have to run the dam with turbines disconnected to lower the water level since there's nobody on the receiving end.

That's also why some blocks of hydro power are very cheap (and time sensitive).

baxuz• 5 years ago

I'm gonna voice a rather unpopular opinion.

The only thing crypto is good for:

- earning money by spinning up GPU fans

- playing the crypto stock market

- money laundering

- buying weapons

- buying drugs

- buying humans

I'm glad that the EU is at least trying to put an end to this: https://www.euronews.com/next/2021/07/21/eu-will-make-bitcoi...

gogopuppygogo• 5 years ago

These “assets” are usually just participation trophies in decentralized Ponzi schemes. Bitcoin is propped up by the ongoing tether scandal that is now larger than Bernie Madoff ever was.

Salgat2• 5 years ago

People need to remember that using up the available renewable energy on crypto just means there's less available for other consumers to use. The idea is to reduce electrical demand which makes it easier to shift towards 100% renewable. Adding all that electrical demand just keeps around non-renewable energy longer since few countries are able to go 100% renewable on their current demand.

Ekaros3• 5 years ago

The renewable argument never made any sense to me. Electricity is mostly fungible if crypto wasn't using it something else would or it would be used instead fossil or it wouldn't be produced in first place. Every single one of those options much better than spending it on fairly useless speculative bubble asset...

empraptor• 5 years ago

Difficulty of the work needed is lowered if it takes too long for miners to find the solution. I'm sure there is a point at which mining becomes not worth doing financially. But that may not happen anytime soon.

epylar• 5 years ago

What estimate puts it at 1TW? I'm seeing an estimate of 148.77 TWh per year, which is about 17GW.

nanidin2• 5 years ago

Estimates on Bitcoin energy usage put it at over 1TW now. I believe it was comparable to the energy consumption of Argentina.

I'm not sure this factoid is germane to GPU shortages, since no one is using GPU's to mine bitcoin these days.

It would be more relevant to cite the energy usage of Ethereum or Dogecoin.

kragen16• 5 years ago

No, https://cbeci.org/ says Bitcoin uses 0.01176 TW, not 1TW. You can take a deep breath of relief! The real energy use of Bitcoin is only 1.2% of what you thought it was!

So, if you thought Bitcoin energy usage was a pretty bad problem but not world-endingly dire, you should now think it's insignificant. If that isn't what you think, it probably means that your opinions are not based on careful cost-benefit analysis, just partisanship, and should therefore be disregarded.

disgruntledphd2• 5 years ago

escaping capital controls in certain currencies). Some are not (ie all the illegal usages).

I don't really understand how these are different, given that escaping capital controls is by definition illegal (otherwise you could just use the normal banking system).

pW9GLKxm9taFEhz• 5 years ago

Are people mining crypto on PS5s and Xboxes?

officialchicken3• 5 years ago

No love for automotive infotainment systems and dashboard gauges? Those have actually caused real economic damage due to manufacturing shutdowns.

zip1234• 5 years ago

While Crypto is certainly a contributor to demand, I think a large part of the problem is related to a demand spike similar to the 'toilet paper shortage', where companies try to stockpile because they hear there will be a shortage, which in turn makes the problem worse. Additionally, COVID stoppages caused chaos in supply.

ATsch• 5 years ago

The toilet paper shortage is kind of a bad example, because it was caused by a very real and sudden shift in demand from the very seperate commercial and personal toilet paper manufacturing markets.

cwizou3• 5 years ago

I don’t see much evidence that TSMC ever really slowed production, at least for their most advanced processes that are in high demand.

One thing I heard is that the drought (worst one in 50 years in Taiwan) has really affected them, and various sources seem to confirm it, here's one : https://fortune.com/2021/06/12/chip-shortage-taiwan-drought-...

And while I wholeheartedly agree with the crypto/GPU issue, all in all, the GPU market is overall fairly tiny compared to TSMC's total output.

Most of the GPU issue is linked to massive demand and conservative allocations that were bought by GPU makers a while back. Adding extra allocation because of demand is really hard specifically on constrained high end nodes like GPU uses.

Car makers and others in the industry don't use those nodes, they use older ones and those are equally constrained.

The GPU/crypto issue is the cherry on top of an already very constrained TSMC, it seems.

PragmaticPulp4• 5 years ago

And while I wholeheartedly agree with the crypto/GPU issue, all in all, the GPU market is overall fairly tiny compared to TSMC's total output.

From an economics perspective, it doesn’t really matter. The price of a market-rate good is the marginal price of producing one more unit. As long as cryptocurrency is financially incentivizing people to consume 100% of the marginal production, prices will continue to go up.

This also cascades down their lineup: Vendors who would like to use 7nm for their chip will instead choose 10nm, which will bump some of the customers who wanted to use 10nm back to the 12nm or 16nm nodes and so on.

another_story2• 5 years ago

Drought has been over for awhile now and it never really slowed chip production.

xyzzy21• 5 years ago

A recent Typhoon (one of the half dozen that hammered China) refilled all their reservoirs about a month or so ago.

The one thing that complicates economics is that it's not a linear equation like they teach in Macroeconomics. The equations are more or less "true" in a vague sense but each term is actually a differential equation term in both time and other quantities.

If you are familiar with simple one variable ODEs per STEM undergrad courses, imagine the 2nd order forms but now those exist across many variables and time spans. It makes you realize that CNBC is just pulling causes/effects and making predictions out of their asses.

routerl• 5 years ago

The drought was over months ago. Taiwan is well into typhoon season (they've had two already). The water reservoirs are full[1].

And TSMC was never really affected. They were not forced to save water, unlike every other company on the island.

[1] https://www.taipeitimes.com/News/biz/archives/2021/07/05/200...

webmobdev4• 5 years ago

One thing I heard is that the drought (worst one in 50 years in Taiwan) has really affected them ...

This is the one aspect of manufactuing of chips that many are actually ignorant about - it needs huge amounts of pure water.

This is the main reason why India doesn't yet have any fab, despite having the human resource for it and investors and government showing great interest to setup one.

Two or three decades back Intel desired to setup a fab in India, but the deal fell through because it would mean India would have to divert a huge amount of water from agriculture and potable water for the population to such fabs. TSMC has approached the indian government many times (even this year) seeking permission to setup a fab in India. But the indian goverment has remained non-commital.

The indian government believes it is in their long-term interest to wait for fab tech to evolve to use less water. Indian states already squabble over sharing water resources, and India has to feed a billion people, and such a diversion of resource doesn't make sense in the long-term.

(Perhaps the James Bond movie was right - we'll all be fighting for fresh water in the coming decades. :)

BogdanPetre• 5 years ago

https://archive.ph/7bGOO article link

mywittyname3• 5 years ago

One thing I heard is that the drought (worst one in 50 years in Taiwan) has really affected them,

The power issues earlier this year in Texas also impacted production.

Weather issues are often the cause of the bust cycles in silicon manufacturing. Just people outside of the industry rarely discuss when memory prices or whatever spike due to a typhoon hitting Japan/Korea/Taiwan. This year, we've have major weather events hit chip production across the globe, at basically the same time, plus the pandemic.

_huayra_2• 5 years ago

Honest question: is it possible to make a cryptocurrency that does not rely on some real-world scarce resource (e.g. chips, electricity, drive space)?

This seems to be a cornerstone of what makes any crypto valuable in the first place (scarcity), and as long as that scarcity has real-world consequences, it seems like it would have the same result.

Chia claimed to "Save the world from proof-of-work wastage", but it would just turn a GPU crunch into a HDD crunch.

akircher• 5 years ago

“Work” doesn’t have to be wasteful. It could be based on the number of pieces of litter that were collected, the number of meals to the homeless that were served. It’s just easier to measure when work is something wasteful.

gbaygon• 5 years ago

It exists and it’s called “proof of stake”, see Cardano and ETH2 for example.

The pros and cons are debatable but the technology is interesting. If you want to know more I recommend the Ouroboros whitepapers by IOHK.

formerly_proven5• 5 years ago

The underlying problem is that you need to prevent sybil attacks, i.e. group X creates many peers in the network and so gets much more voting power than they "ought to" have.

The only known way to do so is through attaching a real-world cost to ~votes. The way PoW does so is through equating votes and hashrate, so votes cost real money because hashrate requires real hardware. PoS works in mysterious ways, but the basic idea is that votes are equal to prior balance by essentially putting some of that balance "into escrow" in order to vote.

xxs5• 5 years ago

the short version is: "NO", if there is no barrier to enter/mine/plot/whatever - then it'll be abused to no end.

JackC• 5 years ago

Decentralized currencies rely on proof of economic waste.

It's possible to imagine forms of economic waste that have different externalities, e.g. different environmental impacts.

But we don't have evidence yet (that I know of?) that introducing one decentralized currency reduces waste in another one -- if you did introduce a new currency that wasted economic value in a new way, there's no evidence that crypto as a whole would waste less of the existing things, it would just start wasting that thing too.

In this model crypto is like ... an emergent antipattern of networked civilization, where the network starts to waste every economic resource that it can "see" and provably waste.

bitcurious• 5 years ago

Chia claimed to "Save the world from proof-of-work wastage", but it would just turn a GPU crunch into a HDD crunch.

Chia actually hasn't resulted in an HDD crunch. The economics of it are such that further investing in HDD storage isn't profitable, yet already Chia is the most decentralized and resilient crypto. I say resilient because price collapsed but allocated storage hasn't.

simonh2• 5 years ago

GPUs are a marginal factor in this. The main factors are several impacts from Covid-19, US trade restrictions on SMIC chip exports from China (a big supplier of low and mid-range chips which this is actually all about), and the Taiwan drought.

The Covid-19 impact itself is multi-pronged. Many chip plants closed or reduced output due to the lockdowns, but also the silicon used in chip production is the same material used to manufacture vials so vaccine production also impacts high quality silicon availability. Finally early in the epidemic a lot of manufacturers that consume chips, such as car makers, cut production. This lead to some chip foundries being closed as they were non-viable and it's taking a long time for those foundries to get re-commissioned or other foundries to expand to make up the gap in capacity.

another_story2• 5 years ago

Taiwan drought has been over for awhile now.

cle• 5 years ago

According to TSMC's chairman, the shortages are mainly due to:

- Covid-19 effects on production

- US-China trade war

- Increased demand due to the pandemic

- Increased 5G demand

- Increased HPC demand

https://asia.nikkei.com/Business/Tech/Semiconductors/TSMC-he...

https://roboticsandautomationnews.com/2021/05/26/tsmcs-chair...

wiz21c• 5 years ago

It’s frustrating to watch so much of the output

well, frustrating maybe. But you know what, chips production is not like gravity, there are human controlling who gets what chip... Someone, somewhere could better arbitrate things...

And it's not the invisible hand which is, as often, well, invisible.

drcode2• 5 years ago

Cryptocurrency miners are handing TSMCs boatloads of money that they are using to grow their R&D efforts. Cryptocurrency, in the long term, will be amazing for the advancement of GPU technology.

(though we should still move crypto away from GPU mining for environmental and security reasons)

nivenkos3• 5 years ago

I wish some governments would start shutting down the fiat exchanges.

neb_b9• 5 years ago

If they shut those down you can still purchase through decentralized exchanges. https://bisq.network/

beiller• 5 years ago

Are they also raising prices of CPUs? Arm chips? Your argument is based on an assertion that sounds like it could be right, but is it? Hasn't every country in the world been injecting cash stimulus into people's hands in an epic attempt to boost demand across all industries? Also why are miners the target here. Are there not deep learning, gamers, anything else who also want to use these monsterous compute units? (GPUs specifically). Raising the price is temporary because someday another chip maker can be born. Every day the lithography tech is getting cheaper and cheaper is just a matter of time till this resolves itself. And let me ask, are chips a human right like water and food? We're getting close but honestly life can go on without GPUs can't it?

colejohnson66• 5 years ago

Miners are the target of anger not (necessarily) because it’s wasted energy,[a] but because them using GPUs creates a self serving cycle: Difficulty goes up, more GPUs are bought to counteract that, repeat. This isn’t helped my the monetary reward for doing so.[b]

Deep learning, gaming, etc. are different in that someone doing 2 way SLI doesn’t make others need to do the same. If my online opponents are playing on RTX 3090s, I’m not forced to upgrade to play with them.

[a]: The energy usage is a byproduct of the proof-of-work system

[b]: hence why things like Folding@home, SETI@home, etc. never gained massive popularity like coins did; they don’t reward you except in feel-good thoughts

ErikVandeWater• 5 years ago

"Shortage" is a technical term to describe a situation where outside influence is preventing supply from meeting demand at the market clearing price. I do think crypto falls into this category, as well as numerous government policies (every tax creates a shortage).

dannyobrien• 5 years ago

Is there any evidence for this claim?

nsxwolf• 5 years ago

This could be a possible explanation for the Fermi Paradox. Advanced civilizations almost become space faring, but at around the same time they discover cryptocurrencies and funnel all their planets resources into it, until they become stranded and die out.

Tenoke2• 5 years ago

BTC GPU mining hasn't been profitable for years. ETH GPU mining (the main one) has gotten way less profitable recently and is scheduled to not be a thing in 6 months to a year. The GPU demand for mining has already lessened in the last months and you can see decreased 2nd hand prices..

Every comment that blames BTC for chip shortages is likely largely incorrect and looking in the wrong place.

Hjfrf4• 5 years ago

What do you think ASICs are made of?

pkulak• 5 years ago

Can we say "Bitcoin" when we're talking about Bitcoin and not lump all proof of stake and other very efficient systems in with proof of work coins?

alpineidyll3• 5 years ago

Don't forget the main advantage of mining over buying coin is to avoid all fiat associated regulations. So it's not just about slightly cheaper tokens, it's really about distributing the cost of tax evasion and money laundering.

dcow2• 5 years ago

Is it tragedy of the commons, then? Once things settle, won’t people learn that adding 1 additional GPU only increases my cost by 1 and doesn't increase my reward? Can’t we design a system where the number of transactions processed scales with the compute power of the system rather than striving to always keeping block time constant?

AnthonyMouse3• 5 years ago

This is yet another way we’re all forced to pay the price for cryptocurrency.

Bitcoin has existed for more than a decade. This is yet another way we're all forced to pay the price for COVID-19.

When everybody started working from home, companies whose employees had desktops had to buy them all laptops. People with old home computers bought newer ones once they started using them 14 hours a day instead of two. Demand went up.

A bunch of car manufacturers thought the pandemic was going to crush demand for cars, so they canceled all their chip contracts. Then it didn't and they bid up the price of chips trying to source all the ones they canceled the contracts on.

The primary cost of Bitcoin mining is the electricity, not the hardware. If there is more demand for hardware, the world can build more fabs. Assuming we're given some advance notice, which this year we haven't had because COVID-19.

And the reason the electricity consumption is bad is that we don't have a carbon tax, so people are burning coal to mine Bitcoin, which is Very Bad. But it's also Very Bad that people are burning coal to power electric heaters or elevators or anything else, because the problem is burning coal.

If people were mining Bitcoin by building wind turbines, nobody would care. It might even improve the world by increasing the economies of scale for renewable energy production.

f6v2• 5 years ago

Bitcoin has existed for more than a decade.

But I haven't seen "buy bitcoin here" signs in the cities(that aren't tech hubs) until recently. Now people are randomly asking "what's the next big crypto?" trying to make quick money.

cwkoss2• 5 years ago

Cryptomining incentivizes green energy investment

EVa5I7bHFq9mnYK• 5 years ago

GPUs are not used to mine Bitcoin, they are used to mine Ethereum. Bitcoin is mined by different chips, also made by TSMC, but in far smaller quantities.

Taek4• 5 years ago

Cryptocurrency chips are less than 5% of TSMCs total production, it's not the major driving force in the shortage.

machiaweliczny• 5 years ago

Yes, but efficiency is opposite of roboustness/resiliency.

babypuncher6• 5 years ago

This is just plain untrue

anabis• 5 years ago

I am hoping that someone comes up with a semi-reusable proof-of-work system , like chess board positions, Mersenne primes, or protein folding. Kind of like Re-captcha.

zabatuvajdka• 5 years ago

Well Bitcoin will die anyway because Ethereum actually does something useful and they’re onto Proof of stake.

Honestly folks should pull their money out and invest in something tangible like starting a business that ACTUALLY CREATES VALUE.

wskish• 5 years ago

There is an ugly feedback loop scenario where the crypto bubble accelerates inflation due to the high demand crypto places on energy and semiconductors and the proportion of global GDP downstream from energy and semi. Inflation then loops in more demand for crypto assets (as an inflation hedge) creating ugly feedback loop until governments act to break it.

ChuckMcM• 5 years ago

I agree that it is simply an excess of demand, the whole bitcoin rant though. Really?

There is a demand for semiconductors that exceeds supply. You have made a leap that the current demand driver is bitcoin and its consumption of GPUS. As much as I appreciate the sentiment that Bitcoin is a waste, that leap doesn't hold up when you look at the actual numbers for semiconductor demand.

The number one demand item for 7nm semiconductors is cell phones.

If you read the various analysts reports you will find this sums it up well: It(demand) is mainly driven by the increasing demand for consumer electronics and the integration of semiconductor into several devices across sectors like automotive, industrial, communications, military, and others. (that is from this report[1] that for $2500 you too could read it (https://www.marketreportsworld.com/global-semiconductor-mark...))

During the pandemic it appears that everyone upgraded their TV (at least in the US) which, not surprisingly, consumes a lot of semi-conductors. The pandemic has also botched a lot of logistics which will sort itself out but these small bumps can cause unusually large ripples in the supply chain because so many industries are built around "just in time" delivery of raw materials. Semiconductor manufacturing is a process that is intolerant of frequent line starts/stops.

So TSMC, knowing that new fabs cannot come online instantly, has chosen to risk alienating their customers a bit by raising prices to capture the value associated with their assets (productive plants) during this period.

[1] To be clear, I didn't pony up the $2500, I looked at a number of sites that reported on the contents of the reports and pulled quotes from them. Market information is itself a market.

UncleOxidant• 5 years ago

As long as GPUs are profitable for mining

What crypto currencies are still profitable to mine with GPUs? Not bitcoin - mining btc went to ASICs long ago. Not Ether which is now POS.

polux332• 5 years ago

Ether is not POS yet.

jonathanpeterwu• 5 years ago

I highly doubt the chip shortage a la increased chip demand from a company perspective has to do with gaming/mining GPU demand.

Much of the supply demand can be traced to increased car chip demand (Toyota cutting production by 40%) as well as general device chip demand across many sectors.

polux332• 5 years ago

What ?

Those GPUs are being useful for securing a network hosting close to $100B of stablecoins. https://stablecoinindex.com/marketcap

Not talking about other more volatile crypto as you'd be tempted to assert their values should be 0 in a perfect world.

You can argue all day that's wasting energy, the crypto-ecosystem, chip manufacturers, miners, energy providers, users, developers, traders, bankers and companies driving billion of dollars of revenue (Aka value for human beings who will produce and consume goods in the real World with this revenue ) out of it are proving that you're missing the bigger picture.

I've never understood HN's concerns with crypto. Following the same logic, people are literally burning petrol in their cars while it could be used for <insert supposedly better use case>

Is it for ecological reasons ? You're still moving 2 tons of metal everywhere you go, and eating meat.

Cryptos are not less moral or valuable than plenty of things you do or cherish. Let people mine crypto, eat meat at Wendy's driving their F150, because the world is not black and white.

exporectomy• 5 years ago

It's no fun before supply catches up with demand, but when it does, we'll be in a world that has higher chip production capacity and maybe some advances will come from all that extra money chip makers will be making. It seems more promising long term than, some under-produced stagnant technology like nuclear power plants.

ayngg• 5 years ago

The state of cryptocurrencies is nothing more than a visible symptom of larger systemic issues that have clearly gotten out of control. It would be much more beneficial to try and understand why the market has decided to consider it valuable in spite of everything you have said rather than just blame and dismiss it based on its impact. We aren't paying the price for cryptocurrency, we are paying the price for policy that has made cryptocurrency attractive.

orliesaurus3• 5 years ago

Goodbye dreams of owning an Nvidia GPU in 2022 - I ain't paying cutthroat prices on ebay/amazon. Guess we're buying Intel!

Sidenote: Intel manufacturers their own stuff, and so is Apple right? Their new cool chips are all in-house or are they through TSMC?

theandrewbailey• 5 years ago

Apple's ARM chips are 100% TSMC manufactured. While Intel makes its own CPUs in house, some of Intel's forthcoming GPUs (Arc?) are from TSMC, too.

https://www.techgadgetguides.com/news/apple-partner-tsmc-wan...

https://www.pcgamer.com/intel-alchemist-gpu-tsmc-6nm-process...

icegreentea22• 5 years ago

30xx series Nvidia GPUs were manufactured on Samsung btw.

girvo2• 5 years ago

Though current talk is that the next generation of Nvidia GPUs are TSMC, too:

https://www.pcgamer.com/nvidia-geforce-rtx-40-series-gpu-arc...

girvo2• 5 years ago

The upcoming Intel Arc discrete GPUs are indeed manufactured by TSMC

Cu3PO42• 5 years ago

Intel has their own foundries, but they are using TSMC N6 for their announced gaming GPUs, so they are subject to much of the same supply constraints. Apple is also using TSMC for their A-something chips.

jdprgm2• 5 years ago

Coming up on a year since product launch and people camping out at Best Buys around the country literally last night. It's unreal.

orliesaurus3• 5 years ago

Was the leak about the re-stock legit?

ksec• 5 years ago

1. This is specifically mainstream node, or everything except leading edge 3nm / 5nm.

2. Those price has been like that for sometime since the chip shortage. They just make it official now.

3. The mainstream and social media will and always have been blaming it on TSMC.

4. Everyone wants all the capacity they need, while not paying a cent more. This announcement will "somehow" made it fair for everyone in the industry.

5. The current component price has very little to do with wafer pricing. As with all commodity pricing, they will only swing back once supply catches up.

6. In general I think this is a good, TSMC has been leaving far too much money on the table and benefiting GF and SMIC.

PragmaticPulp4• 5 years ago

1. This is specifically mainstream node, or everything except leading edge 3nm / 5nm.

Yes, but only because leading edge is contracted out well into the future. Prices for those nodes will definitely be higher when contracts are written.

LinuxBender• 5 years ago

Is TSMC based out of Taiwan? Do they have fabrication plants anywhere else? What company will pick up the demand if/when China takes control of Taiwan?

stackbutterflow• 5 years ago

_If_ China takes control of Taiwan. And that's a big if.

sct202• 5 years ago

TSMC has a few smaller fabs currently outside of Taiwan, 2 in China, 1 in the US (WaferTech not the Arizona plant under-construction) and 1 in Singapore.

icegreentea22• 5 years ago

Samsung and Intel are the other two closest fabs in terms of technical capability. TSMC is clearly in the lead right now. And while the gap is very large in technology cycle terms (they're between 1 and 2 generations ahead at this point), in real world terms (like... considering what a fucking gongshow China invading Taiwan would be), it's not -that- big of a deal. It'd be a major speedbump, but not world changing (as opposed to the other ramifications of an invasion).

xxs5• 5 years ago

T in :TSMC: stands for Taiwan.

reilly3000• 5 years ago

Theoretically that will spawn some real competition which is sorely needed. In reality fabs are hard to spin up, but this does draw attention to the matter.

zigradett• 5 years ago

Bitfinex (which has been outlawed in the USA) keeps printing Tether to prop up the price of Bitcoin, graphics cards are snatched up as soon as they are manufactured, and they're using an Argentina-sized amount of power to keep the whole thing going. Yes, it works, but no one on earth will ever use these Bitcoins to buy two pizzas ever again. What's the end-game, at this point? As many bagholders as possible?

drcode2• 5 years ago

The end game is to transition to Proof of Stake, which doesn't have these problems and has other security advantages.

phone86753093• 5 years ago

Cool, when is Bitcoin moving to Proof of Stake? Before or after the FSF release Hurd?

rfd4sgmk8u17• 5 years ago

Not for Bitcoin. PoS is a broken system that reinvents oligarchies. Proof of Work is the only secure protocol that works today -- possessing the real, desirable properties like decentralization and censorship resistance.

Don't tell me about vaporware ETH2.

The end goal for Bitcoin is Dyson spheres around stars. And it can be no other way.

colinmhayes4• 5 years ago

Bitcoin will never move to PoS. The community is far to fractured, without a leader they'll never agree.

floatboth• 5 years ago

Yes. Someday Tether will implode like all scams do. The results will be spectacular.

gemexe• 5 years ago

Who is using GPUs for bitcoin nowadays?

StephenSmith• 5 years ago

I'm in charge of sourcing components for multiple companies right now. I believe they could double (100%) prices and companies would pay it. There's chips that I'm sourcing from obscure places in China just to get the part and paying whatever price they ask.

Designers are getting overwhelmed because they're having to redesign boards for components that are available, only to realize by the time they finish the changes, the part they redesigned for is also out of stock.

There's been some talk of a Chip-induced cold war, and I would say that's not crazy given the market conditions. I also love the guy who posts here all the time saying he works for the company that makes the machines that makes the chips and they can't make more machines because they don't have the chips that go in them. XD

pcurve2• 5 years ago

Their margin is approaching 40%. They're basically printing money at this point. It's hilarious how a manufacturer can be so profitable nowadays.

ozarkerD• 5 years ago

Genuine question because I’m unfamiliar with the market. Why aren’t competitors undercutting these big players? 40% is ridiculous

ren_engineer2• 5 years ago

"service economy" was always a meme being sold to the gullible masses, manufacturing capacity is the only thing that matters for an economy. Manufacturing has always printed the money

It amazes me how the US allowed itself to be nearly deindustrialized after manufacturing effectively won them WWII and global dominance. Now the US can't even make ventilators or face masks

skybrian• 5 years ago

On the other hand they are spending billions on building new plants. I guess those are assets, though? I wonder what cash flow looks like.

spfzero2• 5 years ago

To their credit, they own unique tech that makes the chips built on it the most attractive in the market.

Very very few manufacturers are in that position.

11thEarlOfMar7• 5 years ago

Concur. We are currently paying a chip broker $6.30 for an Infineon chip we typically buy by the 100,000s for $0.47. Cuz without them, our customers cannot sell their $10,000,000 product.

iyn2• 5 years ago

Out of curiosity, what's the $10,000,000 product?

mrfusion2• 5 years ago

No problem paying six dollers then?

dingaling• 5 years ago

Bosch recently opened their own chip fab in Dresden, primary focus for now is on automotive chips and those required for their in-house tools and appliances:

https://www.bosch.com/stories/bosch-chip-factory-dresden/

fy20• 5 years ago

This makes a lot of sense as Bosch make so many automotive parts. In Europe, it doesn't matter whether you buy a BMW, a Peugeot or a Volvo, under the hood they are all using Bosch electronics to control the engine and many other parts of the car.

HeyLaughingBoy3• 5 years ago

by the time they finish the changes, the part they redesigned for is also out of stock

One of the things my last employer did to get around availability problems was to buy a vendor's entire supply of a chip we could use and then redesigning the product to use it. IIRC, the supply was projected to be enough to last a year. Hopefully, a year from now it will have proven to be a good decision :-)

It's crazy out there!

spfzero2• 5 years ago

Similarly, my company just redesigned a product after running out of an IC that's been on order for many months, still without an estimate on delivery by the distributor.

We redesigned it to use another chip we had in-house, intended for another product, but that product sells for much less and is in less demand, so...

We initially thought we could move pins around in firmware, and the parts have the same footprint, so it seemed possible, but they were different enough that we had to rev the PCB. Now we're waiting for PCBs and crossing our fingers that they will test out.

tdeck• 5 years ago

There's chips that I'm sourcing from obscure places in China just to get the part and paying whatever price they ask.

When sourcing like this, how do you ensure that you're not getting factory seconds or counterfeit parts?

AnotherGoodName• 5 years ago

From my experience no one cares if they are as long as they more or less work.

Source: I'm a software engineer who has had to fix so many issues due to unannounced component changes from suppliers.

"Oh you just replaced the specific USB chip with something different that has a whole lot of errata (Bugs in chip logic that you have to work around in software) and didn't tell us? GREAT! THANKS!"

jpm_sd4• 5 years ago

It's a nightmare. A broker in HK recently quoted me $71/ea for an industrial temp rated 10/100 Ethernet PHY (KSZ8081MNXIA) ... That is a roughly 50x markup. We're making a design change instead. I am now buying qty 500-1000 of any new part that is getting designed in, before the design is even started.

Our Analog Devices sales rep told me to expect another 12-18 months of everything being completely fucked. That was based on a conversation he recently had with TSMC. It's going to be super fun.

user3939382• 5 years ago

I found it on Amazon for $8, not sure what quantity they have: https://smile.amazon.com/1Pcs-KSZ8081MNXIA-Txrx-3-3V-32Qfn/d...

11thEarlOfMar7• 5 years ago

Be careful out there. We got burned by a scam broker in HK:

- Establishes a physical address, might be an abandoned building.

- Sets up a web site with full catalog of parts offered, many hard to find. Might be an actual defunct business they are fronting to look authentic.

- Take orders, demand payment in advance.

- Operate without shipping anything (they don't have any inventory) until the police start poking around.

- Shut down and reincarnate in a new address, new domain, new name, new logo, same catalog and e-commerce

runeks• 5 years ago

I am now buying qty 500-1000 of any new part that is getting designed in, before the design is even started.

I bet you’re not the only one doing that. No wonder there’s a shortage.

ironSkillet• 5 years ago

Which companies do you think are in a good position to benefit from these supply chain issues, and which are going to suffer?

MangoCoffee2• 5 years ago

The company has said it will make $100 billion in capital investments over three years through 2023.
At the same time, "it will be very costly to manufacture in the U.S. and Japan," a member of the TSMC executive team said. The company is building a cutting-edge semiconductor facility in the U.S. state of Arizona and is considering opening its first Japanese chip plant in Kumamoto.

TSMC heed the call of US to build a new fab in AZ. It seem logical to raise their prices to meet this "demand". A fab in the US will not generate as much profit as Taiwan or China fab due to labor cost/benefits.

a3n• 5 years ago

Chip making uses "a lot of water." (Parts of) Arizona is experiencing water shortage, particularly aquifer draw down.

I wonder what the effect of chip making in Arizona will be in Arizona, relative to other water use.

Parts of Arizona by law don't meter aquifer use, which disincentivizes current ag users to conserve, and has incentivized corporate ag to relocate there. (From memory, and I may have botched that memory)

I wonder if TSMC is locating in an unmetered location, or getting a formal water regulation break.

MangoCoffee2• 5 years ago

"Counterintuitively, the famously thirsty industry can even improve the local water supply due to a focus on reclamation and purification—Intel has funded 15 water restoration projects in the Grand Canyon State with a goal of restoring 937 million gallons per year, and it expects to reach net positive water use once the projects are completed."

Here's arstechnica's article regarding fab in AZ

https://arstechnica.com/gadgets/2021/06/why-do-chip-makers-k...

systemBuilder4• 5 years ago

Taiwan engineers work for $30k/yr and a handful of stocks that's all the they want!!

f32jhnjk33jj2• 5 years ago

Thank you cryptominers for everything you did for the mankind, especially huge GPU prices and insane air pollution caused by your mining farms.

neb_b9• 5 years ago

Also, thank you for providing fast and cheap remittance payments to poorer countries.

colinmhayes4• 5 years ago

fast and cheap

???

bongoman37• 5 years ago

sarcasm? Nobody uses crypto for remittance payments to poorer countries. It is mostly used by rich folks in countries like China to get around exchange restrictions.

beervirus• 5 years ago

poorer countries

That's a funny way of spelling "ransomware criminals."

andrewmcwatters2• 5 years ago

I keep seeing this number again and again. 20%. Sometimes 25%. Sometimes 15%. Usually no lower than any of the three.

noelherrick• 5 years ago

Gosh I wish Apple with their loads of cash and drive to have the highest performing chip would get big ole fabs on US and EU shores. The fact that a disputed country owns the best fabs is downright scary for the future of the world (add in that the disputing country is the next superpower).

segphault• 5 years ago

TSMC is building a $12b manufacturing facility in Arizona that will be able to produce the 5nm chips used in Apple products. They are fully aware of the geopolitical risks and are taking responsible steps to mitigate them.

To the extent that the higher unit prices help them cover those investments, I'm more than happy to pay whatever portion of the increase gets passed on to consumers.

babypuncher6• 5 years ago

Apple is already on 5nm. By the time that fab is built, Apple will want to be on 3 or 2nm

pradn• 5 years ago

There's a complex game being played here by TSMC, the Taiwanese government, and the US. TSMC as a company probably wants to be resilient by having manufacturing in multiple locales. But it has a unique set of benefits provided by Taiwan - a solidly educated workforce with fewer options than in, say, the US for top-tier jobs, a dense and well-connected country that allows them to shift talent much easier than elsewhere, and a government thats extremely interested in maintaining their dominance. These factors make it hard to move out of Taiwan. Taiwan itself wants to keep its golden goose, the one thing it has that guarantees it a seat at the negotiating table with the US, China, and EU. Why voluntarily give up the one thing that makes people want to defend you, especially in light of NATO promises of protection falling flat recently with Afghanistan and the anti-internationalist angle made prevalent by Trump. The US, of course, wants to protect its economy, reliant on high-tech components and be the guarantor of a country that gives the US leverage over other countries.

The 5nm plant is a good step for the US, but AFAIK, produces a small fraction of total 5nm output. And by the time it opens, 3nm will be the leading edge. It feels like a small concession by TSMC/Taiwan to keep the US off their back, but not significant enough. I mean, how do you even transfer thousands of talented engineers that far, with logistics and factory construction, too? It's not easy.

janekm• 5 years ago

Apple know that just setting up fabs without all the infrastructure to package, test, and then manufacture products with the chips doesn't really solve anything. The last time Apple tried to do any manufacturing in the US the project failed because they couldn't find anyone to manufacture the screws: https://www.nytimes.com/2019/01/28/technology/iphones-apple-...

njovin• 5 years ago

Forgive the naive question but why doesn't the US government fund several foundries in the US immediately? $20B over 3 years is a drop in the bucket compared to a lot of military spending and these chip shortages surely have downstream impact on the defense industry, no?

At this point I'd be much happier subsidizing chip manufacturing than most of the other ways this country spends money overseas.

andrewmcwatters2• 5 years ago

They are currently doing this with Intel afaik

epsilon_greedy• 5 years ago

There were early talks but I believe this only recently became official. See https://www.intel.com/content/www/us/en/newsroom/news/intel-...

nexuist2• 5 years ago

Might scare Taiwan and embolden China? A huge reason we hold Taiwan as an ally is their chip production capabilities. If we become self reliant on those then we don't really need Taiwan and China might try to invade them, which would be bad for our own national security interests.

vmception9• 5 years ago

Why would that be bad for our own national security interests if we have our own semiconductor lines?

What else does Taiwan offer to the US?

We have "strategic bases" everywhere. One being 100 miles from mainland china versus 200 miles makes no difference to US in the 21st century.

A shipping lane maybe? Also not US problem really, got plenty of those too.

noelsusman• 5 years ago

The US Senate recently passed $52 billion for domestic chip manufacturing.

naruvimama3• 5 years ago

It is one thing to build massive fabs it is quite another to run them profitably especially with China in the game, you are competing with a large pool of cheap R&D engineers and a captive market.

This was a mistake with 5G, where each country guarded their patent pool, R&D and failed to collaborate with strategic partners.

kragen16• 5 years ago

Lots of governments have spent billions of dollars trying to build the next Silicon Valley. Shenzhen and arguably Taipei succeeded, but all the others failed. It's not as simple as just spending money; the people whose knowhow makes the endeavor possible have to decide to go there, and then they have to be in charge of it.

The Manhattan Project would have failed, as the German project in fact did, if Oppenheimer hadn't been a physicist, and if the US weren't full of Jewish refugees from Germany who just happened to be physicists. Its immense budget was necessary to its success, but not sufficient.

systemBuilder4• 5 years ago

$20B is enough for 1 foundry if you can find the people but the people at Intel do not make good hires because they don't know how to make state of the art chips at Intel anymore! Our only other domestic fab are the former IBM fabs owned by global foundries in East Fishkill New York but global foundries has given up on state of the art chips too!

thedudeabides52• 5 years ago

Would anyone else on here be willing to pay money for a data feed that showed you real-time measures of semi manufacturer capacity?

thedudeabides52• 5 years ago

No one. Apparently

treeman79• 5 years ago

Good. If they keep making huge profits then others will invest in factories to get in on the action.

sergiogjr• 5 years ago

Market forces at play. Good on them. Move along, nothing to see here.

ffggvv• 5 years ago

thats gauranteed inflation in everything then. GG fed. good job powell

mensetmanusman5• 5 years ago

This reminds me of the early days of 2007, when the strange rumblings of the economy were starting to take place.

If everyone starts raising prices by 20%, will governments be able to spend money fast enough?

Maybe we are about to learn that you can’t stimulate every economy in the world simultaneously.

systemBuilder4• 5 years ago

Intel was stupid. They could have become a foundry 20Y ago like every other chip making company on Earth but they chose instead to greedily try and make cell phone chips three times and they failed all three times at the cost of many many billion dollars! And now nobody really wants their chips and AMD chips are selling like hot cakes using up all The foundry resources while intel chip manufacturing lines stand idle, and useless because Intel thought they would be on top forever!

TSMC hikes chip prices up to 20% amid supply shortage

Related Stories