> Taiwan Semiconductor Manufacturing Company makes the Cerebras chips. Cerebrus warned investors that any possible supply chain disruptions may hurt the company.
They get their chips from the same company that Nvidia does.
They get their chips from the same company that Nvidia does.
It's not necessarily to TSMC's advantage for Nvidia to become a monopolist either, although they wouldn't be totally dependent on Nvidia even if they did because TSMC serves every chip market.
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.
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/
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.
[1] https://www.macrotrends.net/stocks/charts/TSM/taiwan-semicon...
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.
When a foundry wishes to raise capital from the private or public markets, it's bucketed under TMT - which includes software and fabless hardware as well.
This means it's almost impossible to raise capital without a near monopoly and/or government support and intervention - which is what Taiwan did for TSMC and UMC - because the upfront costs are too high and the margins are much lower compared to other subsegments in the same sector.
This is why industrial subsidizes like the CHIPS act are enacted - to minimize the upfront cost of some very CapEx heavy projects (which almost everything Foundry related is).
What an amazingly reductive analogy :)