The Chip Insider®– TSMC's Arabian Flights

TSMC's Arabian Flights – the Hidden Strategy: Speculation that TSMC was working a deal with the UAE for a modern magic carpet of silicon set social networks ablaze with comments. Most, while obvious, didn't make sense… And when they did make sense, they were old challenges that everyone knows… From an Arabian perspective, there are real reasons to prepare for a future after their oil wells run dry. The high capital intensity of the semiconductor industry is very attractive, since this very feature is a very deep moat which … Mubadala changed the world’s silicon map when they engineered the deal to split AMD apart … Mubadala’s strategy was important, as it would prove to be the only successful path out of the IDM strategy: Even when kept internal, the new structure was a paywall between the fabless designer and its foundry … The design side of IDMs becomes like chefs who own their restaurants: getting fatter every day on what they cook as they eat away at the combined profits of the two. Later, Samsung would copy this model, as Dave Zinsner has done at Intel ... As for building a fab in Arabia, the old challenges remain: water and labor… There is a critical India connection here in the geopolitical realm… So, the strategic complications are far greater than a deal with TSMC… This year, the market value of TSMC’s production will account for over a third of the semiconductor sales… this is greater than The Chip Insider’s 2024 sales forecast for the top 3 chip makers combined (Nvidia, Samsung, and Intel). If you wonder how TSMC came to such a dominant position, consider …

TSMC's OIP Ecosystem: … So, the news was more about what’s not new… One thing was clear … though not explicitly said … is that TSMC strategy is shifting from being a pure-play foundry to that of a chiplet foundry. This is because their vision for density is that future gains will come from advanced packaging. Part of this includes gifting 3Dblox to the IEEE. They announced this technology last year, but were unsure at the time where it fit: was it a product or a foundational technology for its OIP? The gifting indicates it’s the latter. It makes sense, because … Synopsys announced a new AI-driven EDA suite …They see this as critical to making the lightspeed jump from billions of transistors on a chip to a trillion-transistors ... Like how EDA enabled the creation of the fabless-foundry business model in the 90s, it’s clear that EDA is again critical to the creation of the chiplet-foundry business model in the 20s.

“If you don’t like what’s being said, change the conversation” — Don Draper, Mad Men