It might even be a good investment to build a fab just to clean up in the event of a shortage. Kind of like how if anyone in Texas had the good foresight to winterize they could have made a year of profit in a few days...
They can try...
Surely they have cash, and so did the Chinese who were signing 10 digit cheques for anybody claiming to be able to setup a modern fab.
Running a fab is not like running a cat video website, or making a cookie cutter electronics from reference designs.
On other hand, if there is a company which can turn off the lights on a dotcom companies like them, it will be a big fab business.
TSMC's Morris Chang's integrity, and softness, completely uncharacteristic to the big ambition, ego, and testosterone-driver semi industry, were what made TSMC stood out. Dirty play in the semi industry was everywhere in nineties.
People who are taking over TSMC from Chang may not share his adherence to morals bordering on altruism.
P.S. Saying what that industry was is by no means a meme. Early silicon valley businesses would've given a heart attack to any modern politically correct business exec. Stuff like this was rather common:
https://www.autodesk.com/products/eagle/blog/wp-content/uplo...
https://www.autodesk.com/products/eagle/blog/wp-content/uplo...
Just read some memories of Fairchild Semi "alums." Stories of men from semiconductor companies stealing each other's wives in the most literal sense, gallons of expensive liquors, contraband Cuban cigars, break-ins into labs, and fisticuffs at business meetings were the world of the valley back then.
You're squaring up against a stickman. The companies cited are not fly-by-night startups "running a cat video website". Dave Cutler got his start on the factory floor, working out better processes for a toilet paper manufacturer. Apple has plenty of hardware chops and the vertical integration bug. Google shook up telecoms by scaring the shit out of the industry incumbents (although they could have stood to get their hands dirtier, Cutler-style[1], and stay in the game).
Although none of this is necessary. The fruit hangs so low here that all it would take is someone half competent who can see the enormous gains to be had by just not doing so many things in the dumbest way possible. This isn't bleeding edge stuff. We're talking catching up on things that that wouldn't even be considered state-of-the-art 25 years ago. Hell, they could start just by drastically cutting back on how many hires they source from the defense industry and have had their minds warped by (and numb to) the bureaucracy and bottomless budgets from that world.
> if there is a company which can turn off the lights on a dotcom companies like them, it will be a big fab business
Not a chance. The semiconductor industry, perversely, has no idea how to put computers to use, and the leadership and organizational structures are aligned against that kind of achievement ever coming from within (or being airdropped in by a leadership hire who cuts across the lanes from another industry) and making the top-down sweeping changes that would be required.
I've seen attitudes like this in the industry many times, and every time such "bright idea man" comes, a previously well faring company dies.
Take a look at Sun Micro, people now will never believe that they once had ambitions to "corner" the server/internet market the very same way those bright "financial strategist" boys suggesting chip companies to "go undercut this, and that, and we will own the Internet!"
You're ignoring everything I'm saying. (Probably because you don't want to consider the idea that emperor really isn't wearing any spiffy new clothes.) We're not talking about bright ideas. We're talking about dumb, dead simple ideas. Dumber than UPS's fabled "let's try to minimize how much time we waste on left turns".
Go watch that Dave Cutler clip and pay attention to what he says near the end of the video about being a leader and about there being no task too small when it comes to getting the job done.
A tangent, but I would really like Google Maps, or some viable substitute to permit "only right turns" as an option.
There are routes where every time it wants me to make a left onto a busy highway from a side street with no traffic light. Knowing where the lights are would be one solution, but "only right turns" wouldn't depend on data.
> Early silicon valley businesses would've given a heart attack to any modern politically correct business exec. Stuff like this was rather common:
Ads like that... seem fairly mild?
I mean this "engage the <poop emoji> out of your users" billboard seems more offensive: https://www.adstasher.com/2017/05/funny-new-emojis-billboard...
> Just read some memories of Fairchild Semi "alums." Stories of men from semiconductor companies stealing each other's wives in the most literal sense, gallons of expensive liquors, contraband Cuban cigars, break-ins into labs, and fisticuffs at business meetings were the world of the valley back then
Err..
I don't think you've ever been out with sales execs from SV companies. "gallons of expensive liquors" sounds like an average Friday night.
> contraband Cuban cigars
Of course no one in SV these days does any contraband drugs./s
-- Signed, someone who is really familiar with the process.
In any case, TSMC is dependent on ASML, which has a monopoly on leading-edge EUV tech.
There is a decent amount of competition at older nodes, like > 40nm. So we'll still be able to make some chips if TSMC completely goes out of business, but obviously it wont scale to the demand and will seriously hamper business, science, and government.
> science
I believe science has access to more compute than it needs. I could be wrong now, but last I checked, a few years ago, the huge computational clusters (both public and private, e.g. @ pharma companies) were under-utilized, especially on legacy-hardware-that-is-still-pretty-damn-good, and scrambling to find ways to engage with outside clients to fill out capacity.
Given what a strategic asset they are, I would expect its not really "conspiracy level stuff" on various plans. After all, the US had attack plans for the UK between the world wars.
Ships would be inspected and food and medicine will be allowed through but all trade goods will be blocked.
But that is all depended on the US and it's allies having a stomach for a naval confrontation or that the Chinese mainland umbrella of long range missiles and air defense can be an effective deterrent against that.
This fundamentally mis-states the situation in Texas during the recent cold catastrophe. Gas suppliers that had winterized had their electricity cut off and could not pressurize their distribution. Generators who had winterized had their gas supply curtailed. And so on.
It was a systemic failure by the PUCT and the RRC, who are the regulators. Ultimately, the Governor who appoints those boards and the Legislature who grants their authorities failed.
It wasn't some yahoo generator too dumb to winterize, although there were plenty who didn't find it financially convenient to do so.
Price gouging laws generally discourage this business model.
Hmm. When would this foresighted person have made their preparations? What would installation have cost? What would maintenance have cost? More or less than a year's worth of profits?
Power that's selling right now for $25/MWh was selling at the $9,000/MWh cap. A 36,000% increase in price can surely pay for enough to, say, keep your pressure sensing equipment from freezing over. (Which is why the 1,280MW STNP Unit 1 went offline at a $11.5MM/hour+expenses cost.)
Not to mention the lives and property damage that might have been spared.
> When would this foresighted person have made their preparations?
As far as _when_, maybe after the 2011 TX cold snap that took generation offline for similar reasons. Or the one in 1989.
Basically I think this idea of ultra-high pricing during a crisis providing an incentive to prepare for one (as opposed to paying for the capacity to that the crisis doesn't occur in the first place), is not necessarily well-formed: it's feels like it's assuming the market remains efficient in one half while it also requires that the market has effectively failed due to the crisis we're trying to structure the market to prevent.
At one point, Texas electricity prices hit above $9000/MWh. Running the generator for 1 hour would net you $9000. Not bad for peak profit. The average profit will be a bit lower; here's some very rough back of the envelope math:
Taking a look at an example here: https://dfw.cbslocal.com/2021/02/22/texans-sky-high-power-bi...
> On a typical February day, she pays Griddy less than $2.50 for power. But the one-day cost spiked to hundreds of dollars after the storm. In all, she was automatically charged $1,346.17 for the first two weeks of February
So $2.50 a day over 2 weeks is $35. The spike to $1346 is 38x her normal cost, and Griddy uses wholesale prices. I see wholesale costs around 6.7cents/kWh, so at 38x normal pricing, that means electricity would cost around $2546/mWh. Not as high as $9000, but still a nice profit averaging for 2 weeks. Profit per hour would be $2343/hour; multiply that by 24/day and 14/two weeks, gets you $787,248 total. Subtract out $4000 for the rental, and you get $783,248.
Close to a million dollars over 2 weeks is not a bad haul. Even if you divide the price by 2, it's still pretty good.