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NVDA also fabs at TSMC and has 60% gross margins, so there's a lot of room to undercut on price while still being profitable.

The real question is why doesn't TSMC charge more? How can a customer using the most cutting edge fab get 60% margins? (Similar for other customers).

Clearly there's a lot of pricing power on the fab side that's not being asserted.



Samsung Foundry exists, and Nvidia used them for the 30 series iirc. TSMC just doesn't have that much pricing power as a result. Their best processes are obviously good, but if they try to gouge too much customers probably just take the hit for a year. If they have to they can always sacrifice size/power for performance on an older, cheaper process.




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