Comment by credit_guy
1 year ago
That would be the point of spinning it out. They could have an IPO, raise as much capital as there is in the observable Universe, and build enough fabs to satisfy all the demand.
1 year ago
That would be the point of spinning it out. They could have an IPO, raise as much capital as there is in the observable Universe, and build enough fabs to satisfy all the demand.
That wouldn't work. Even TPUv4 was on a 7nm node and you don't just build a 7nm fab just like that. If it were that easy NVIDIA would already be building their own fabs, as they have basically raised as much capital as there is in the known universe (bigger market cap than the entire London stock exchange), but they seem to prefer to let the fab experts get on with it rather than compete with them.
LLM AI is largely HBM bottlenecked anyway i.e. Samsung, SK Hynix and Micron are where the supply chain limits enter the picture.
Fabless companies that are large enough such as apple front the capital for fab companies like TSMC to build fabs dedicated to their use. They do, in effect, build their own fabs. If the Google TPU group had the inclination they could have done the same.
The memory industry just got busted from the covid bubble and are not too keen to jump into the AI bubble.
They might front the money, but don't own them. Apple gladly lets someone else own and operate the fabs and take the risk (which is smaller with Apple as a client)
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Unless they've been issuing a ton of new shares recently and then selling them into the market at something resembling the current share price, the amount of capital they've raised is nowhere near their current market cap.
But it looks like they've actually been buying back some shares - they've got fewer shares outstanding than they did a year or two ago.
Not that it matters much - they've still got plenty of cash and other capital available.
There seems to be this idea that the people who design and operate fabs are infinite, when it's actually a technically demanding job.
We don't even have enough McDonald's employees, how the hell are we going to just suddenly have multiple companies creating fabs left and right? TSMC cannot even build their Arizona plant without a shortage of workers.
Every time someone says "we don't have enough employees", remember to add "....at the (almost certainly too low) wage being offered".
Maybe but then where are those CPU fab experts working right now that offer them higher wage?
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Intel has been trying to make cutting edge fabs...and we all know how that is going.
There is good reason nobody wants to be in the fab business.