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Cost has been the challenge for the past 30-40 years at least. Many semiconductor manufacturers have folded, dropped out, or merged over the years due to costs

Cost has been the challenge for the past 30-40 years at least. Many semiconductor manufacturers have folded, dropped out, or merged over the years due to costs putting development of the next node out of their reach. If the remaining 3 drop out of the race, they will be following the same pattern as many before.

wtallis 3y ago
R&D and tooling costs have grown enormously to bring new fab process nodes online, but the actual per-wafer costs of materials and operating expenses historically haven't been growing to the same alarming degree. But that's changing, as new nodes are increasingly relying on power-hungry tools with low throughput that wear out mask sets at an unprecedented rate. It's not implausible for the industry to reach a point where new leading-edge processes will never mature to the point that they make economic sense for the low-cost applications that currently stay a few nodes behind the leading edge.
- viscanti 3y ago
  The problem here would be that if mask sets wear out at an unprecedented rate, it might not make sense to use these cutting edge nodes in the future (if/when we're several nodes ahead by then) for the things that currently use older nodes. Maybe Moore's law is dead for the types of things that stay 2 or 3 nodes behind state of the art all the time.
cubefox 3y ago
That was because of competition. The cost per transistor actually went down by a lot. If it soon goes up significantly, it will stop to make economic sense to increase transistor density any further. Why pay the same amount of money for a less powerful chip? Maybe it will make sense for mobile SoCs or some other energy constrained applications which benefit from lower power draw of smaller process node chips. But power efficiency can outweigh lower absolute performance only to some degree.
- throwawaylinux 3y ago
  > That was because of competition. The cost per transistor actually went down by a lot. I'm not talking about the marginal cost to make the device, I'm talking about the R&D and capital expenditure to develop and build the machines for the next node. You can be reductive and say it always boils down to competition, but then you would also say that ultimately shrinking will end when it can no longer compete with mature nodes. Competition in both cases. So I'm not sure what exactly that's getting at. > If it soon goes up significantly, it will stop to make economic sense to increase transistor density any further. Why pay the same amount of money for a less powerful chip? That's not strictly true, performance of a transistor still has value. Companies like Apple pay premiums to get in early on leading edge nodes, more per device than the mature nodes they move from.
  - cubefox 3y ago
    Competition with "mature nodes" is different in the sense that here one company (like TSMC) will be "competing" with itself. They will just stop building next gen fabs if their chips wouldn't sell. > That's not strictly true, performance of a transistor still has value. Companies like Apple pay premiums to get in early on leading edge nodes, more per device than the mature nodes they move from. Apple can't increase the price of their product arbitrarily. So if the price per performance increases, the new iPhone would be slower than the old one. Maybe people will still buy it if it has better power efficiency, but that is a trade-off which has its limits.
    - mschuster91 3y ago
      > Apple can't increase the price of their product arbitrarily. Not arbitrarily, but IIRC Apple's profit margin on iPhones is over 100% - the iPhone 14 Pro max is supposed to have a BoM cost of ~470 $ and retails for well over 1000$. That means Apple can both afford the high upfront premium/R&D cost of going to a smaller node and to eat up higher SoC costs and yet still have a profit per unit that would lead most other companies' CFOs to drool. On top of that, even if the economics should not work out for mobile... a fully spec'd out M2 Ultra Mac Pro runs at ~14.000$, Intel ones IIRC could reach 50.000$. The crowd that pays such absurd prices has zero problems paying a grand or two more for higher performance.

wtallis 3y ago

R&D and tooling costs have grown enormously to bring new fab process nodes online, but the actual per-wafer costs of materials and operating expenses historically haven't been growing to the same alarming degree. But that's changing, as new nodes are increasingly relying on power-hungry tools with low throughput that wear out mask sets at an unprecedented rate. It's not implausible for the industry to reach a point where new leading-edge processes will never mature to the point that they make economic sense for the low-cost applications that currently stay a few nodes behind the leading edge.

viscanti 3y ago
The problem here would be that if mask sets wear out at an unprecedented rate, it might not make sense to use these cutting edge nodes in the future (if/when we're several nodes ahead by then) for the things that currently use older nodes. Maybe Moore's law is dead for the types of things that stay 2 or 3 nodes behind state of the art all the time.

cubefox 3y ago

That was because of competition. The cost per transistor actually went down by a lot. If it soon goes up significantly, it will stop to make economic sense to increase transistor density any further. Why pay the same amount of money for a less powerful chip? Maybe it will make sense for mobile SoCs or some other energy constrained applications which benefit from lower power draw of smaller process node chips. But power efficiency can outweigh lower absolute performance only to some degree.

throwawaylinux 3y ago
> That was because of competition. The cost per transistor actually went down by a lot. I'm not talking about the marginal cost to make the device, I'm talking about the R&D and capital expenditure to develop and build the machines for the next node. You can be reductive and say it always boils down to competition, but then you would also say that ultimately shrinking will end when it can no longer compete with mature nodes. Competition in both cases. So I'm not sure what exactly that's getting at. > If it soon goes up significantly, it will stop to make economic sense to increase transistor density any further. Why pay the same amount of money for a less powerful chip? That's not strictly true, performance of a transistor still has value. Companies like Apple pay premiums to get in early on leading edge nodes, more per device than the mature nodes they move from.
- cubefox 3y ago
  Competition with "mature nodes" is different in the sense that here one company (like TSMC) will be "competing" with itself. They will just stop building next gen fabs if their chips wouldn't sell. > That's not strictly true, performance of a transistor still has value. Companies like Apple pay premiums to get in early on leading edge nodes, more per device than the mature nodes they move from. Apple can't increase the price of their product arbitrarily. So if the price per performance increases, the new iPhone would be slower than the old one. Maybe people will still buy it if it has better power efficiency, but that is a trade-off which has its limits.
  - mschuster91 3y ago
    > Apple can't increase the price of their product arbitrarily. Not arbitrarily, but IIRC Apple's profit margin on iPhones is over 100% - the iPhone 14 Pro max is supposed to have a BoM cost of ~470 $ and retails for well over 1000$. That means Apple can both afford the high upfront premium/R&D cost of going to a smaller node and to eat up higher SoC costs and yet still have a profit per unit that would lead most other companies' CFOs to drool. On top of that, even if the economics should not work out for mobile... a fully spec'd out M2 Ultra Mac Pro runs at ~14.000$, Intel ones IIRC could reach 50.000$. The crowd that pays such absurd prices has zero problems paying a grand or two more for higher performance.