TSMC Is Close to Securing IBM Contract

[cageymaru]

TSMC is close to securing a deal to produce premium server chips for IBM. IBM produces far less servers than Intel, but are considered to be the "Rolls Royce" of servers as they are much more expensive. "IBM mainframes can fetch anywhere from $300,000 to $1 million or $2 million per set, while typical HP and Dell options built on Intel chips go for around $7,000, Kuo said." IBM designs their own chips, but until now has been using Globalfoundries as its foundry partner. AMD announced earlier this year that it has contracted TSMC to make 7 nm server processors. Arm Holdings is also working with TSMC on data center chips.

TSMC is motivated to seize these opportunities by its desire to rely less on Apple and diversify away from the maturing smartphone market -- its main growth driver over the last decade. About half of TSMC's revenue for 2017 came from mobile chips, with Apple alone accounting for 22% of its $32.11 billion in sales. The chips IBM wants also power the core processors in Apple's newest iPhones. These are the industry's smallest and most cutting-edge semiconductors, and well-placed supply chain sources told the Nikkei Asian Review that IBM will put them into its next-generation mainframe servers. "We think Intel could gradually lose some market share ... for its most lucrative data center server chip business," Liu said.

 

[mkk]

I can't shake this unsettling feeling that production of consumer DIY chips end up on a rather low priority tier in 2019. With everyone piling on TSMC.

 

[Zarathustra[H]]

With all these different companies moving to TSMC, I wonder what their capacity looks like...

Having only one major fab company with a working 7nm process could be a problem. I hoe this doesn't result in shortages in the consumer space. I mean, they are being used by Apple, Nvidia, AMD, IBM, and who knows who else. There was even a leak a while back that Intel was considering using them...

Would suck if manufacturing capacity either drives up the cost of or limits the supply of AMD's rumored to be fantastic Zen 2 CPU's...

 

[Kor]

With all these different companies moving to TSMC, I wonder what their capacity looks like...

Having only one major fab company with a working 7nm process could be a problem. I hoe this doesn't result in shortages in the consumer space. I mean, they are being used by Apple, Nvidia, AMD, IBM, and who knows who else. There was even a leak a while back that Intel was considering using them...

Would suck if manufacturing capacity either drives up the cost of or limits the supply of AMD's rumored to be fantastic Zen 2 CPU's...

You would hope it would end with a new fab being built to meet demand, they obviously have the revenue.

 

[Zarathustra[H]]

You would hope it would end with a new fab being built to meet demand, they obviously have the revenue.

Hopefully, yeah, but building a fab takes a LOOOONG time and costs a lot. These capacity adjustments are not ones that can be done cheaply or overnight.

 

[Kor]

Hopefully, yeah, but building a fab takes a LOOOONG time and costs a lot. These capacity adjustments are not ones that can be done cheaply or overnight.

True but you would hope the ball get's rolling sooner rather than later, that or they upgrade another facility and drop some of their 16nm capability.

 

[clockdogg]

Regarding TSMC capacity... IBM Rolls Royce chips won't need to yield in the millions - because Rolls Royce.

With the drooping iPhone sales, Apple could be even more courageous and use older, cheaper nodes to produce new and more expensive phones. And because the entire computing industry prioritizes the Enthusiast Niche above all others, we will get all the Zen 2s that we want, probably for free. Because... we're just that important.

 

[cdabc123]

I have been meaning to pick up a power 9 workstation for abit (4k ish) because they are cool as shit. Im very intrested to see what follows for ibm