  Rather, the only thing that will truly motivate TSMC to take on more risk is competition.

I see it another way for more chip manufacturing capacity.

If big tech wants TSMC to increase capacity drastically without TSMC having to take all the risk of CapEx, then they can pre-pay for wafers from TSMC.

They can each give TSMC $10b now in cash and guarantee themselves wafers in 2-3 years that it takes to bring a new fab online.

TSMC is rightfully conservative. If they commit to spending an extra $30b on a fab now that won't make a single wafer until 2029, without any guarantees from big tech, they're stupid. Who knows if the demand will still be there (my guess is yes, but who knows?).

In my opinion, I think it's getting close to this. Nvidia will surpass Apple as TSMC's biggest customer this year. This will start a war for TSMC wafers in 2026 in my opinion. When you have that much demand, customers will be forced to pay well in advance.

There is already a war for memory, silver, copper, energy. No reason why chip production won't be next.

▲ 40 minutes ago | parent | next [-]

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▲ vondur 6 hours ago | parent | prev [-]

Isn't that what Apple did originally with TSMC? Payed for capacity rollout?

	▲	aurareturn 6 hours ago \| parent [-]
		I think most customers nowadays pre-pay for fab capacity. TSMC is running at 100% capacity for their N5, N3, and N2 nodes. Apple certainly makes extra commitments to be the first to use a new TSMC advanced node. They will be the first to ship an N2 chip by a few months when they release the iPhone 18 Pro. However, I'm talking about booking wafers from a fab that hasn't started and won't make a single wafer 3 years from now. The scale is different. Imagine Nvidia, Apple, Google, AMD, Microsoft, Meta, Amazon telling Wall Street in their earnings report that they sent TSMC $5 billion each this quarter and won't receive a single wafer for another 3 years from the investment. I fully expect this to happen soon. I'm almost certain that you'll hear in the upcoming earnings reports that big tech sent Samsung, Micron, and SK Hynix billions in advance payment to secure memory supply years from now. I think this is likely the same for chip fab capacity soon.