[S|A] Apple has a fab

[tviceman]

If you look closely at the specific SKUs they EOL, they will EOL the high-ASP high-visibility SKUs because they want to migrate the demand for those products to the higher-margin opportunities that come with obsoleting the existing models (get those 2500k owners to upgrade to 4670k or get owners of older CPUs to upgrade to the higher margin 4670k instead of the lower margin 2500k) but they will keep on producing volumes of low-ASP chips for the emerging markets for years and years...plus chipsets and supporting ICs like thunderbolt and so on.

There is of course a general node migration cadence to the entire portfolio, but it is optimized to maximize the value that comes from a depreciated toolset and production line.

For example, just to put some numbers to it from a source of public info, TSMC still generates 29% of its entire revenue from the production of wafers on nodes 0.11um and larger (0.11um to 0.5um).

That is a lot of wafers still being produced on process nodes that have been in production for over a decade. That is what you need to be able to do with your fabs if you intend on owning your own fabs.

If you don't intend on maintaining production of dated process nodes then being an IDM just isn't for you, that is what being fabless is for.

You are more knowledgeable than an encyclopedia!

 

[Idontcare]

he wants to make a buck or two off his paywall and his moles who have no problem betraying their employers by telling confidential information to Charlie.

There is no honor among thieves, and it isn't "painting in a bad light" to call out a thief when they flaunt fenced goods right in front of your face.

He said directly that he doesn't pay sources for information. He wouldn't tell me why his sources tell him anything though.

Also your quote is above the 50th percentile in support for posts about him, because you do think he has actual sources with real info occasionally.

My poor grammar got the best of me there, what I meant to say was that he is making a buck off of his moles (because they don't charge him for the info) by way of lowering his overall cost structure and thus retaining more of his paywall bucks for himself.

But yes, I do believe Charlie has access to legitimate info, it just isn't being given to him under any legitimate pretense.

IP is IP, and when your employer entrusts you with its IP it expects you to protect it from theft no different than it expects you to not sell the company's printer on craigslist (or in this case, freely give it to someone who then sells it on craigslist).

 

[shady28]

Not sure how this thread got into Snowden and pay media sites, but.... I wasn't going to read all that, so apologies if this was already stated.

The word is that Apple is planning to use GloFlo's New York Fab 8, which uses similar tech to Samsung's Austin facility.

http://www.saratogian.com/articles/2013/07/15/news/doc51e4a47c00180698095006.txt

 

[Idontcare]

Not sure how this thread got into Snowden and pay media sites, but.... I wasn't going to read all that, so apologies if this was already stated.

The word is that Apple is planning to use GloFlo's New York Fab 8, which uses similar tech to Samsung's Austin facility.

http://www.saratogian.com/articles/2013/07/15/news/doc51e4a47c00180698095006.txt

Very smart of Apple to do what it can to basically invest in the future of all three major foundries. (assuming the 14nm Samsung rumor is legit)

Thus ensuring R&D pipelines are better funded and ensuring Apple has a better chance of having access to product-differentiating process-node capabilities as well as keeping the competition alive so pricing doesn't become monopolistic down the road.

Apple is doing for the foundry industry what Dell (and HP, etc) ought to have done in the late 90's to the x86 industry...make sure no single business is guaranteed to have a stranglehold on the market and thus preventing the any given foundry from becoming so powerful as to be able to dictate terms and conditions to its customers in a monopolistic sense.

 

[NTMBK]

Yeah the irony is that the paywall doesn't stop plagarism, because journalists can afford to pay the $100/$1000 but normal readers cannot.

However, I presume that signing up for a subscription requires accepting a legal disclaimer that you will not redistribute information from the premium parts of the website- which at least gives him legal recourse against this form of plagiarism.

 

[NTMBK]

Not yourself, because as you say you wouldn't pay the $100. If you've noticed, no real info is without a paywall on his site now (wasn't true when the wall first started).

It's like if Snowden was selling proof to any world embassy who could pay, that the US was spying on them.

Oh, I'm well aware of that. I've made several posts complaining about that very fact on the S|A forums. At first the promise was that news would not be behind the paywall (or would only be for a month, before going public) and only analysis would be paywalled. That went out the window pretty quick...

 

[NTMBK]

The economics of owning your own fab requires you to have a business that entails the production and continued sales of legacy products.

If Apple were to buy a fab that was equipped with all the required tools for 22nm production, that fab needs to still be producing 22nm chips 6-8 yrs later in order for the financials to make sense.

This is why a foundry owns the fab but the fabless customer does not. Apple is not about selling legacy products, they are about getting people to upgrade and feeling like their perfectly working 2nd generation iPad needs to be replaced with a spanking new 3rd generation iPad and so on.

A typical fab will add on new nodes to its production load as time goes on, but it rarely phases out the production of legacy nodes. For a foundry this is not an issue because there are always a supply of small fabless companies out there who trail the leading edge by 4 or 5 nodes for cost and complexity reasons.

But what would apple do with a 22nm production line in 6 yrs when they want to be have all their latest gizmos and gadgets using 7nm? If the conclusion is going to be "just shut down all 22nm production and requalify all the tools for 7nm production" then they may as well remain a fabless company that throws gobs of money at a foundry to ensure the foundry has the ramp-to-capacity that Apple needs.

(the economics there are in Apple's favor, they are not fab experts, they are gadget and software experts, the foundries are the fab experts)

To own a fab pretty much requires you to have a desire to have a product portfolio that entails producing legacy and lagging-edge products for years and years. This works for IDMs because they force themselves to adopt a business model that enables it - Intel and AMD getting into the chipset business for example, or foundries being able to support lagging-edge fabless companies, or businesses that do catalogue sales such as automotive or medical parts that need be produced for 10yrs or more.

Apple does not fit that mold currently.

Now maybe they have grand plans for a shift in their business strategy itself, and with that might come the opportunity to sell large volumes of legacy products for years and years down the road such that owning a fab begins to make economic sense?

Very much true. Hence I strongly suspect that what has happened is some exclusivity clause, in return for a massive wodge of cash specifically earmarked for investment in brand spanking new tools in a fab. The fragment of the article that we can see even says (emphasis mine):

No we are not joking, Apple just bought into a fab, and not in a trivial way either.

Beefing up one of the minor players like UMC or GloFo in return for exclusive use of one of their fabs for X years, and the ability to have input into where their process R&D goes, seems much more plausible.

Could it be that Apple aren't happy with the stated direction that the foundries are taking? As far as I'm aware, an awful lot of them are not focusing on high end, Intel beating performance processes, and instead going for low-power mobile processes. (For instance GloFo, with it's 14XM process.) If Apple really is going to this much effort to shape a foundry, then it makes sense that they must want something different from what TSMC, Samsung etc are offering them. Looking for a process with high enough performance to create ARM desktop and laptop chips to replace Intel with, perhaps?