Cadence, Taiwan Semi, Nvidia, the ultimate semiconductor power

[Arthur Hanson]

Will the collaboration of Cadence, TSM and Nvidia will become a chip design and production power house at all levels from simple chips to the most complex AI/ML chips? They have the money and resources that as far as I know are unmatched at all levels. As far as lower level chips does anyone know what partnership will compete at the lower levels? I doubt TSM, Nvidia and Cadence will want to allocate resources to the lower end where margins are far slimmer. Any thoughts on who might dominate the lower end also appreciated.

 

[hskuo]

Vertical integration (Cadence-TSM-NVidia) would be very challenging due to all of them are competing to dominate in the value chain. For example, if NVidia knows how to build chips as good as TSM, he will port it to other foundries to get lower wafer price. If Cadence knows how to twist processes to get better yield, he will pack it as value options for other customers. Same as TSM will try to downplay the dominance of his suppliers and customers. It is a zero-sum game.

 

[phwting]

Vertical integrated companies used to dominate when the market is simple i.e. CPU(AMD,Intel), memory(Micron,Samsung), motherboard(Asus,MSI) and computer(HP, Dell) as examples. The downside is violent cycles when the pc/server market tankes. TSMC can ride out cycles by supplying cell phones(Apple,samsung), compute(AMD, Intel), AI/video/bitcoin(AMD, nvidia) for the leading edge and use depreciated fab's for legacy (auto, industrial controllers, audio). With the rising cost of fabs in the tens of billions, no one industry can support a dedicated fab and survive a market crash.