Comment by aurareturn
5 hours ago
I think it mostly shows that there is no moat
You can argue that TSMC has no moat since Intel and Samsung are also able to eventually make a node as good as TSMC - just a few years later and at smaller scale.
And no one would say that about TSMC.
So there is clearly a moat there somewhere.
No. In the semiconductor industry, the "catch-up" player isn't normally spending less in absolute R&D terms.
Comparing the R&D costs of creating GPT-4o vs. DeepSeek V3 (the latest gen for which we already have good accurate numbers) it looks like the latter cost 1/20th as much to create.
If Samsung could catch up with TSMC for 1/20th of the cost, people definitely would say that TSMC has no moat.
Why do you think Chinese models cost 1/20th to train?
That's the ratio the widely published numbers give [1]. One does not have to believe the numbers [2], but those who do believe them are then justified to conclude that there's no moat.
Which numbers you believe is of course going to affect whether you think there's a moat or not. That's largely orthogonal to your TSMC/Samsung analogy I responded to. If you think the "moatists" are wrong because they believe the wrong numbers, that's fine, but then there's no need for the analogy.
[1] https://galileo.ai/blog/llm-model-training-cost
[2] https://medium.com/@theiand/how-can-deepseek-a-5-6-million-l...
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Please just say what you want to say.
Yeah, I'm not sure if "no moat" analogy stands for chip manufacturing. Even if foundries acquire lithographic nodes, the procedures (temperature, duration, etc) are for them to figure out and are usually kept secret. This secret could be the "moat" that differentiates each foundry's operational capabilities.