Comment by anonymars
8 days ago
If I remember during a previous GPU shortage (crypto?), Nvidia (and/or TSMC?) basically knew the music would stop and didn't want to be caught with its pants down after making the significant investments necessary to increase production
Not to mention that without enough competition, you can just raise prices, which, uh (gestures at Nvidia GPU price trends...)
Similar thing happened with mask manufacturers during COVID.
They didn't spin up additional mask production b/c they knew the pandemic would eventually pass. They learned this lesson from SARS.
Not maxing out production during spikes (or seasonality) in demand is a key tenet of being a "rational economic actor".
too bad the bicycle industry didn't learn this. They acted like COVID was the new-normal, and it has resulted in many companies disappearing when they learned the hard way that demand for bikes in a pandemic is neither sutainable nor normal.
I believe the TSMC CEO said that in a recent interview. They're aware that their now biggest customer Nvidia has a less broad product portfolio than Apple and the high volumes they buy propably won't last. It's too much of a risk to plan more Fabs based on that.
They are indeed planning for more fabs, in order to meet volumes.
Last week: “TSMC's board approves $45 billion spending package on new fabs”
https://www.tomshardware.com/tech-industry/semiconductors/ts...
Silicon Valley is arguing that TSMC isn't investing enough. They should be investing hundreds of billions to build fabs, like how big tech is investing in the AI buildout.
$45 billion for new fabs is peanuts compared to Amazon's $200b and Google's $180b investment in 2026.
Can't really blame TSMC though. It takes years for fabs to go from plan to first wafer. By the time new fabs go online, demand might not be there. Who knows?
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Somewhat ironically the AI boom means Nvidia would've easily made their money back on that investment though and probably even more thoroughly owned the GPGPU space.
But as it is it's not like they made any bad decisions either.