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Source: Content compilation from economics, thank you.Adam Smith is confused about microelectronics.
In 1790, the great economist died, and the two -cylinder steam engine of James Watt was considered a representative of the technology cutting -edge.If he can recognize the prefix "nano" -s for an early -catering classicist who is proficient in dead words at the age, Instead of one billion yuan of modern semiconductor measurement units.
In the era of Smith, the word "billion" has entered English, but the number it represents seems unpredictable.
In NVIDIAs latest Blackwell artificial intelligence (AI) chip, how many semi -scholars coins are engraved with 200 billion transistors?Even for an enlightened Scottish rationalist, this is also a black magic.However, the person who observed the "division of labor is limited by the market" is no stranger to the global chip industry.Aside from modern terms, the semiconductor supply chain is Smiths insight.
As the market scale continues to expand, sales increased from US $ 45 billion in 1979 (calculated today) to US $ 600 billion in 2024. It is estimated that by the 2030sAt the beginning, it will exceed $ 1 trillion, and the labor force will be divided.
The integrated chip giant of the 1970s has gone forever, just like Intel of the United States that year, do everything by itself.This is a highly professional era.Nvidia and other designers are preparing to make blueprints. "Foundries" such as TSMC in Taiwan turned these blueprints into physical products and sent a set of silicon wafers of one company into another group of companies assembled.These machines also include parts from more professional suppliers and so on.
The accident of artificial intelligence is not so detailed.Since mid -202, the worlds largest market value of 100 semiconductor companies has increased by $ 5.4 trillion in shareholders.48 foundries and equipment manufacturers received only $ 1 trillion.The 32 "Untitled Worse Factory" chip manufacturers (designed but did not manufacture their own processors) received $ 4.2 trillion.Nvidias chip is favored by artificial intelligence model manufacturers, occupying three -quarters of the number.(Intel and Samsung, including 20 companies that continue to design and manufacture chips, have little growth.)
Nvidias good luck can be explained with its dazzling financial performance.From the first half of 2022 to the same period this year, its income increased almost four times.It is expected to achieve a net profit of $ 7.1 billion in 2024, higher than $ 8.4 billion in two years ago.Nevertheless, the anger of foundries and tool manufacturers is understandable.Although Nvidias 31 -without wafers has only half of the foundries and equipment companies, and the net profit is only two -fifths, their value is almost as high as foundry and equipment companies.Their expenditures on fixed assets and R & D; d) were less than half of their expenditures.In addition, equipment manufacturers (although not asset -intensive foundries) have higher operating profit margins and better capital returns than chip manufacturers of non -wafer manufacturers.
Considering the side effects of Smith highly professional on the chip industry, this difference is even more curious: except for the busy wafer -free factories, the chip industry is high everywhere everywhereconcentrated.With the reduction of the product segment market, the chip supply chain has become like a series of micro -monopolies and double -headed monopolies.TSMC and Samsung (they also produce chips for themselves, but also produce chips for customers) to dominate the foundry business.ASML in the Netherlands is the only supplier of advanced light -inspired equipment.85% of Japanese companies DISCO sell for precision tools for grinding and cutting silicon wafers.The two American companies Cadence and SynopSys jointly have chip design software markets.Japans Advantest and Teradyne of the United States control the chip test after production.
Although the market size is small, the entry threshold is high.Compared with the market size, downstream companies have invested huge amounts of capital in capital investment and R & D.For Disco, this number is equivalent to 10%of its total target market; for ASML and TSMC, this number exceeds 20%.State -owned and Chinese challengers who are willing to bear the necessary investment are excluded from foreign markets for national security reasons.To make matters worse, existing enterprises can receive $ 150 billion in the Western and Japanese governments that are eager to rebuild the domestic chip industry.
The financial director of a large tool maker sighs. If all this looks like a renter paradise, it feels not.For some miniature oligarchs, this is because they sell products directly to the same domineering company, which connects the value chain.Only a few buyers will weaken the sellers market power.Chris Miller, a semiconductor history scholar at Tofz University, pointed out that other companies benefit from more diverse customer bases, but they would rather not squeeze TSMC and other big buyers.
When the demand for artificial intelligence chips such as Microsoft and Google makes NVIDIA collect high costs for each new model, this calm is more difficult to maintain.Its gross profit margin is currently 75%, higher than 60%in 2022.Blackwells price may be $ 40,000 per unit, and technology giants are considering buying $ 1 million or more.TSMC is expected to increase the price of cutting -edge manufacturing by 15%in the profit pool.Other companies that help turns blueprints into reality believe that they have the right to gain some accidents, especially when the United States restricts its geopolitical opponents to export high -tech products from high -tech products that cause income flow from China to slow down.
If the decarcular factory and their suppliers increase the price, they can increase profitability at the same time.But this may lower the needs of the final product.Investors are preparing to punish any signs of such weakness. For example, on October 29th, the bland sales forecast announced by AMD, a rival AMD in NVIDIA, which limits the pricing capacity of chip manufacturers.This may have a small deterrent effect on downstream.
If these reluctant oligarchs are not so shy when showing the rent -seeking ability by the pool, dont be surprised.
https://www.economist.com/business/2024/10/31/Can-nyone-besides-nvidia-make-bigs-from- chips
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*Disclaimer: This article was originally created by the author.The content of the article is the authors personal point of view. The semiconductor industry observation and reprinting is only to convey a different view, which does not mean that the semiconductor industry observation agrees or supports this view. If there are any objections, please contact the semiconductor industry to observe.
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