This makes me wonder why Microsoft doesn't invest more in semiconductor tech. Microsoft and Intel's interests are very much aligned, and they have a common competitor (Apple) who is ahead of them both.
Although, that raises the question of whether MS would be better off staying married to x86 long-term or moving in the direction of Apple Silicon / Rosetta. I'm inclined to think that they would be best served by sticking with x86 long-term for the sake of optimal backwards-compatibility, so long as there isn't some inherent reason for the x86 instruction set to be dramatically less efficient than ARM. I don't see why they couldn't ultimately catch up to or at least become competitive with Apple by pushing development and adoption of x86 SOCs alongside standards like Evo, which their taking over the business could potentially help accelerate.
[1] https://gs.statcounter.com/os-market-share/all/united-states...
I wouldn't.
My smart fridge also has a powerful ARM CPU and a touchscreen and a modern OS. Is it also a computer? Can I use it for productive work? Doe every wearable and IoT device qualify as a "computer"?
So sticking back to general purpose computers that are not locked in a vendor ecosystem and let you install and run whatever you want from whatever sources, Apple is less than 10%, so yeah, with ~80% marketshare Microsoft is basically a monopoly in that space.
For the chip design part, Microsoft to some degree is already doing this. Microsoft has worked with AMD and Qualcomm to design custom chips for things like the XBox and Surface devices, and word on the street is that Microsoft is moving into designing their own ARM chips top-to-bottom similar to Apple [1]. I think moving into custom chip design is no brainer for all of the tech players with a market cap > $1 trillion, and as far as I'm aware, most of them are already doing it.
The second part is the much trickier part. Actually getting into the fab business at a cutting edge process node is extremely difficult, because the fab business is both extremely capital intensive AND takes an enormous amount of time to build up. If Microsoft or any other tech player wanted to muscle their way into the cutting edge fab business, the requirement isn't a one-time $20 billion investment; it's $20 billion a year every year for at least a decade just to catch up. The catching up part is insanely difficult too; for starters, the EUV photolithography machines you need to even begin building a fab are made by only like two companies in the world, and both companies are backordered for years because of TSMC, Samsung, Intel, and others. Then, once you have caught up, you have to continue pouring money into the business forever in order to keep up. TSMC and Samsung and (up until recently) Intel are able to do this because of the sheer volume of manufacturing they do; smaller fabs that don't have the volume just aren't able to keep up because they don't have the revenue. The fab business is a business where economies of scale are really serious and really large, and I don't think Microsoft alone is at a scale large enough to for these economies of scale to start to take effect. Even established chip players like NVIDIA and AMD don't even consider themselves large enough for these economies of scale to apply today.
So the question for Microsoft (and really any fabless chip company) really basically boils down to: do they commit to $20 billion a year every year indefinitely until the end of time to build and run their own in-house cutting edge fab business, or do they just pay TSMC each year to manufacture for them, and thereby offload the risk and cost of the fab business? The overwhelming answer in the industry is: just pay TSMC. That's what Apple, Google, Amazon, NVIDIA, AMD, Qualcomm, etc. all do.
[1] https://www.theverge.com/2020/12/18/22189450/microsoft-arm-p...
Their only potential competitive advantage is if they close down Windows to MS-only chips, which I don’t see happening.
There's another option for Microsoft: invest $20B once in Intel, in return for some exclusive rights.
I think the entire point is that the fundamental thesis driving Intel's new strategy (and this is the same thesis behind TSMC, Samsung, etc) is that the cost of developing cutting edge process nodes has reached a point where it is beyond the ability of any single company to afford based on their own product volume. Therefore, if Intel wants to be able to keep up, it needs to expand volume by opening up foundry services to other companies, a-la TSMC. If this thesis is true (and over the past few years it definitely seems to be), then it explains why no individual tech player would want to get into building their own fabs, it also explains why TSMC's model is successful and why Intel is going after that same model now, and it also explains why no foundry would really want to sell exclusivity to any given single player.