$100 billion to be invested to increase chip fabrication capacity!

[mikeywith]

According to this article TMSC plans to throw in 100B to increase its chip-making capacity over the coming 3 years

Taiwan Semiconductor Manufacturing Co. plans to spend $100 billion over the next three years to expand its chip fabrication capacity, a staggering financial commitment to address booming demand for new technologies.

It also mentioned

Intel    $20 billion           To build two new fabs in Arizona
Samsung   $116 billion   Over a decade to expand foundry business

I couldn't find out what a 100B means in terms of their current capacity, it could be a lot or nothing to really consider, this will indeed have a direct impact on mining equipment if Bitmain can buy more and probably cheaper chips - gear prices will drop in the near future when bitcoin price is ignored.

What does everyone here think about this?

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[philipma1957]

According to this article TMSC plans to throw in 100B to increase its chip-making capacity over the coming 3 years

Taiwan Semiconductor Manufacturing Co. plans to spend $100 billion over the next three years to expand its chip fabrication capacity, a staggering financial commitment to address booming demand for new technologies.

It also mentioned

Intel    $20 billion           To build two new fabs in Arizona
Samsung   $116 billion   Over a decade to expand foundry business

I couldn't find out what a 100B means in terms of their current capacity, it could be a lot or nothing to really consider, this will indeed have a direct impact on mining equipment if Bitmain can buy more and probably cheaper chips - gear prices will drop in the near future when bitcoin price is ignored.

What does everyone here think about this?

Now I need to talk multiple coins. Not because I am pro other coins but because the money earned daily is big.

eth hashrate is = to 5.1 million 3080 gpu chips. and before power spent it is about 51 million a day just for eth

that comes to 18.4 billion a year.

btc is 144 blocks a day and they are about 7 coins due to fees.
that is about 1000 coins a day or
60,000,000  which comes to 22 billion a year.

those two coins are about 40 billion a year.

ltc and doge are more than 2 billion a year. did not do math.

brings us over 42 billion in earnings.

I am thinking the rest of the coins bring us over 50 billion a year.

So my question is how long before it gets on line.

Translate that.  Do miners score for 10 months before the chips start coming?

I think it could happen.

i actually think that in the next 10 months Miners will do far better than they did for the last ten months.

[Quickseller]

What does everyone here think about this

There is a huge chip shortage globally currently. Some have attributed this to Covid, but I am not sure.

The chip shortage is affecting everything from cars to computers to miners. The cited investment is an attempt to increase capacity to bring to closer to in line with demand.

A large chunk of the chip capacity is in Taiwan. I would be more concerned about China invading and/or attacking Taiwan when it comes to chip capacity. 

[kano]

If you read outside the Bitcoin world, you will find all over the world, issues claimed related to the availability of chips.
Heck, you can even find server providers stating they have a shortage due to this.

TMSC is not 'just' short on demand for mining chips, it's short on demand for all chips.
As a result they are also directing that production away from companies like Bitmain to other higher profile companies who require their services.

To put it simply, they are not expending effort to make more mining chips, they are doing it to cover their higher profile demand that has indeed risen beyond their current production.

[stompix]

I couldn't find out what a 100B means in terms of their current capacity, it could be a lot or nothing to really consider, this will indeed have a direct impact on mining equipment if Bitmain can buy more and probably cheaper chips - gear prices will drop in the near future when bitcoin price is ignored.

Quite a lot, their planned factory in Arizona was $12 billion, so that would be just in factories another 8 at least, probably with increased capacity compared to the older facilities but the last paragraph in the articles si the real question:

It’s unclear how TSMC -- with $28 billion of cash and equivalents on its balance sheet at the end of December -- intends to finance that record outlay, which underscores the enormous capital required to stay at the forefront of the industry.

100 billion in ten years of net income according to the last statements, 2020 came with an increased demand for chips but will this pace continue for the next years at the same rate? Of course, there is a lot of demand but will not this continuous growth start stalling at one point?
Of course, they probably have a well-written plan, with far more details than we could ever acquire reading newspapers.

As for Bitmain, they've already managed to get TSMC angry with that recruiting, maybe the way to get cheap chips is to fill in the queue with another producer who has been left with no clients by TSMC. And we will see no cheaper gear as long as people buy it for 4 times the launch sale value, so unless the BTC price goes down 4x..oh no, better not!

[Quickseller]

the last paragraph in the articles si the real question:

It’s unclear how TSMC -- with $28 billion of cash and equivalents on its balance sheet at the end of December -- intends to finance that record outlay, which underscores the enormous capital required to stay at the forefront of the industry.

100 billion in ten years of net income according to the last statements, 2020 came with an increased demand for chips but will this pace continue for the next years at the same rate? Of course, there is a lot of demand but will not this continuous growth start stalling at one point?
Of course, they probably have a well-written plan, with far more details than we could ever acquire reading newspapers.

TSMC is planning on investing $100b over three years. To finance this capital expenditure, they will need to either sell stock, or sell bonds/debt, or form some kind of partnership with another entity that foots the bill. TSMC apparently has not disclosed how they will pay for the capital investment.

As for Bitmain, they've already managed to get TSMC angry with that recruiting, maybe the way to get cheap chips is to fill in the queue with another producer who has been left with no clients by TSMC. And we will see no cheaper gear as long as people buy it for 4 times the launch sale value, so unless the BTC price goes down 4x..oh no, better not!

IMO, the lack of production capacity of new miners, along with the high price is driving the prices of miners. Difficulty has not kept up with advances in ASIC technology for SHA256 mining, and the price of bitcoin

[NotATether]

TSMC is planning on investing $100b over three years. To finance this capital expenditure, they will need to either sell stock, or sell bonds/debt, or form some kind of partnership with another entity that foots the bill. TSMC apparently has not disclosed how they will pay for the capital investment.

Don't bet on finding this information anytime soon because $100 billion is an enormous amount of money to throw even for Fortune 100 companies. There's already an announced $12 billion they're going to spend on an Arizona plant which is more urgent than in this chip-shrinking research and even that amount's eye-popping enough to delay R&D plans of cash-strapped companies into the future.

Less chips produced = less revenue for TSMC which affects their spending ability. It's not like VCs like SoftBank are going to inject money into anybody just because of a shortage.

I'm still not sure whether it was caused by the pandemic and infections in Taiwan et al. factories or just people losing their mind buying electronics left and right? The first theory sounds more plausible.

[DaveF]

Meh, lets see what really happens.

Remember part of this chip shortage is not due to lack of ability to make chips but lack of orders.
Covid hit, many many many businesses cut their estimates of what they needed for chip supply. TMSC (and others) went out and sold their new found excess chip making ability to other businesses who could now buy at a slightly discounted rate because they had all this spare capacity.

Then people kept buying CPUs, GPUs, and other things all of which needed chips. And look....they were booked 12+ months out.
If you go beyond just reading the press releases and look deeper into what people are saying, yes these new fabs are going to increase production BUT they are also taking older less efficient fabs offline.

Look at Wisconsin and Foxconn: https://www.techdirt.com/articles/20201019/13242145535/employees-say-foxconn-donald-trumps-wisconsin-factory-scam-was-absurdist-hellscape.shtml

-Dave

[Quickseller]

TSMC is planning on investing $100b over three years. To finance this capital expenditure, they will need to either sell stock, or sell bonds/debt, or form some kind of partnership with another entity that foots the bill. TSMC apparently has not disclosed how they will pay for the capital investment.

Don't bet on finding this information anytime soon because $100 billion is an enormous amount of money to throw even for Fortune 100 companies. There's already an announced $12 billion they're going to spend on an Arizona plant which is more urgent than in this chip-shrinking research and even that amount's eye-popping enough to delay R&D plans of cash-strapped companies into the future.

$100 billion is a lot of money, however they should be able to find financing as long as the new capacity will be profitable, and there is sufficient demand to utilize the capacity.

I'm still not sure whether it was caused by the pandemic and infections in Taiwan et al. factories or just people losing their mind buying electronics left and right? The first theory sounds more plausible.

I believe some of the foundries were running at reduced capacity at the beginning of the pandemic, but government stimulus caused demand for electronics to remain elevated.

I don't know this with certainty, however I would suspect that China may be buying up additional chips via intermediaries. Chinese companies cannot buy chips from TSMC. China needs chips, and may use shell companies located overseas to procure some of these chips.

[NotFuzzyWarm]

TSMC is planning on investing $100b over three years. To finance this capital expenditure, they will need to either sell stock, or sell bonds/debt, or form some kind of partnership with another entity that foots the bill. TSMC apparently has not disclosed how they will pay for the capital investment.

Don't bet on finding this information anytime soon because $100 billion is an enormous amount of money to throw even for Fortune 100 companies. There's already an announced $12 billion they're going to spend on an Arizona plant which is more urgent than in this chip-shrinking research and even that amount's eye-popping enough to delay R&D plans of cash-strapped companies into the future.

$100 billion is a lot of money, however they should be able to find financing as long as the new capacity will be profitable, and there is sufficient demand to utilize the capacity.

I'm still not sure whether it was caused by the pandemic and infections in Taiwan et al. factories or just people losing their mind buying electronics left and right? The first theory sounds more plausible.

I believe some of the foundries were running at reduced capacity at the beginning of the pandemic, but government stimulus caused demand for electronics to remain elevated.

I don't know this with certainty, however I would suspect that China may be buying up additional chips via intermediaries. Chinese companies cannot buy chips from TSMC. China needs chips, and may use shell companies located overseas to procure some of these chips.

One source of financing for a new fab no one has mentioned yet is the very same companies that paid for all of the research into smaller and smaller nodes. In other words: Apple, Nvidia, Cisco, Broadcom, et al. They are the ones that have bought up all of the advanced node chip production so having a stake in expanding production to ensure priority production access and or discounted cost for a few years would make perfect financial sense.

As for

Chinese companies cannot buy chips from TSMC

Bullshit. Yes certain specific chips that would fall under ITAR restrictions are verboten but other than that - no restrictions. Where do you think Bitmain, Canaan and Innosilicon get their chips from? The black market  
 

[Quickseller]

TSMC is planning on investing $100b over three years. To finance this capital expenditure, they will need to either sell stock, or sell bonds/debt, or form some kind of partnership with another entity that foots the bill. TSMC apparently has not disclosed how they will pay for the capital investment.

Don't bet on finding this information anytime soon because $100 billion is an enormous amount of money to throw even for Fortune 100 companies. There's already an announced $12 billion they're going to spend on an Arizona plant which is more urgent than in this chip-shrinking research and even that amount's eye-popping enough to delay R&D plans of cash-strapped companies into the future.

$100 billion is a lot of money, however they should be able to find financing as long as the new capacity will be profitable, and there is sufficient demand to utilize the capacity.

I'm still not sure whether it was caused by the pandemic and infections in Taiwan et al. factories or just people losing their mind buying electronics left and right? The first theory sounds more plausible.

I believe some of the foundries were running at reduced capacity at the beginning of the pandemic, but government stimulus caused demand for electronics to remain elevated.

I don't know this with certainty, however I would suspect that China may be buying up additional chips via intermediaries. Chinese companies cannot buy chips from TSMC. China needs chips, and may use shell companies located overseas to procure some of these chips.

One source of financing for a new fab no one has mentioned yet is the very same companies that paid for all of the research into smaller and smaller nodes. In other words: Apple, Nvidia, Cisco, Broadcom, et al. They are the ones that have bought up all of the advanced node chip production so having a stake in expanding production to ensure priority production access and or discounted cost for a few years would make perfect financial sense.

It could be something similar to what BFL and other early bitcoin mining manufacturers did -- sell preorders to finance the R&D of the miners. lol

As for

Chinese companies cannot buy chips from TSMC

Bullshit. Yes certain specific chips that would fall under ITAR restrictions are verboten but other than that - no restrictions. Where do you think Bitmain, Canaan and Innosilicon get their chips from? The black market 
 

I had mispoke. It is certain Chinese companies that are associated with the Chinese military/government that cannot buy from TSMC due to a ban on the sale of certain advanced US IP.

[DaveF]

I had mispoke. It is certain Chinese companies that are associated with the Chinese military/government that cannot buy from TSMC due to a ban on the sale of certain advanced US IP.

From the article:
 

60% of sales from the U.S. and about 20% from mainland China

That does not ring true just to the massive amount of manufacturing going on in China vs. the US.
If they said "60% of sales from U.S. companies" that I would believe.

Could just be my view, but I don't see us here in the US making products here using 60% of TSMCs capacity.

Anyway, lets see how some things shake out. There have been some very very minor drops in some chip prices since Monday. Lets see if it's a blip or the being of a chip price slide.

-Dave

[Biffa]

From the article:
 

60% of sales from the U.S. and about 20% from mainland China

That does not ring true just to the massive amount of manufacturing going on in China vs. the US.
If they said "60% of sales from U.S. companies" that I would believe.

Could just be my view, but I don't see us here in the US making products here using 60% of TSMCs capacity.

I dunno, most of the companies listed here seem to be US based:

[stompix]

I dunno, most of the companies listed here seem to be US based:

Yeah, that's what he said, it's companies based in the US demanding those chips, not factories in the US, Apple might need 25% of those chips but none of them is landing in a factory in the US, and I doubt the others would manage to rise even to 20% US-based production, not even thinking of 60%.

I'm still not sure whether it was caused by the pandemic and infections in Taiwan et al. factories or just people losing their mind buying electronics left and right? The first theory sounds more plausible.

Everyone cut estimates then realized just a few months later that the sales will not only be back but the demand will keep growing as every single damn thing has chips in it and it's more need than ever for those. When you turn your car into something with more sensors and accessories than a student's dorm and you didn't anticipate that you will sell just as many of those and not zero as some morons predicted, there you go!  And now, everyone is placing orders left and right to make sure they don't end up in the same situation making things worse as some manufactures end stockpiling and others with closed production lines
And of course, in the news, they only talk about the ones that stopped production, not about the ones not affected by it.

[Quickseller]

I had mispoke. It is certain Chinese companies that are associated with the Chinese military/government that cannot buy from TSMC due to a ban on the sale of certain advanced US IP.

From the article:
 

60% of sales from the U.S. and about 20% from mainland China

That does not ring true just to the massive amount of manufacturing going on in China vs. the US.
If they said "60% of sales from U.S. companies" that I would believe.

Could just be my view, but I don't see us here in the US making products here using 60% of TSMCs capacity.

Anyway, lets see how some things shake out. There have been some very very minor drops in some chip prices since Monday. Lets see if it's a blip or the being of a chip price slide.

-Dave

Like I said above, it is possible shell companies are being used based in other locations that are buying up some of these chips and eventually sending them to China. This could be USA based companies, or companies based elsewhere. I am not sure how a chip sold to Apple that is sent to mainland China that is used in an iPhone that is sold in the US would be counted. Or how if it was an iPhone sold in China.

TSMC also does not own all of the chip production capacity. Other companies account for about half of the global capacity. IDK how much of this additional capacity is being used by China.