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I think it is less of a trade and more of a symbiotic capital cycle, if I can call it that? Nvidia's willingness to pay exorbitant prices for early 2nm wafers
by Fiveplus 8mo ago
I think it is less of a trade and more of a symbiotic capital cycle, if I can call it that?
Nvidia's willingness to pay exorbitant prices for early 2nm wafers subsidizes the R&D and the brutal yield-learning curve for the entire node. But you can't run a sustainable gigafab solely on GPUs...the defect density math is too punishing. You need a high-volume, smaller-die customer (Apple) to come in 18 months later, soak up the remaining 90% of capacity and amortize that depreciation schedule over a decade.
- alex43578 8mo agoIsn’t the smaller die aspect more valuable early in the node’s maturity, where defects are less punishing?
- Fiveplus 8mo agoThat is the traditional textbook yield curve logic, if I'm not wrong? Smaller area = higher probability of a surviving die on a dirty wafer. But I wonder if the sheer margin on AI silicon basically breaks that rule? If Nvidia can sell a reticle-sized package for 25k-30k USD, they might be perfectly happy paying for a wafer that only yields 30-40% good dies. Apple OTOH operates at consumer electronics price points. They need mature yields (>90%) to make the unit economics of an iPhone work. There's also the binning factor I am curious about. Nvidia can disable 10% of the cores on a defective GPU and sell it as a lower SKU. Does Apple have that same flexibility with a mobile SoC where the thermal or power envelope is so tightly coupled to the battery size?
- genocidicbunny 8mo agoI am curious about the binning factor too since in the past, AMD and Intel have both made use of defect binning to still sell usable chips by disabling cores. Perhaps Apple is able to do the same with their SoCs? It's not likely to be as granular as Nvidia who can disable much smaller areas of the silicon for each of their cores. On the other hand, the specifics of the silicon and the layout of the individual cores, not to mention the spread of defects over the die might mitigate that advantage.
- ricw 8mo agoThey do bin their chips. Across the range (A- and M-series) they have the same chip with fewer / disabled cpu and gpu cores. You pray a premium for ones with more cores. Unsure about the chip frequencies - Apple doesn’t disclose those openly from what I know.
- nebula8804 8mo agoI thought they binned CPUs for things like AppleTV and lower cost iPads?
- jsheard 8mo agoYeah, most of their chips have two or more bins with different core configs, and the lower bins probably use salvaged dies. For example the regular M4 can have 4 P-cores / 6 E-cores / 10 GPU cores, or 3/6/10 cores, or 4/4/8 cores, depending on the device. They even do it on the smaller A-series chips - the A15 could be 2/4/5, 2/4/4, or 2/3/5.
- alex43578 8mo agoWith current AI pricing for silicon, I think the math’s gone out the window. For Apple, they have binning flexibility, with Pro/Max/Ultra, all the way down to iPads - and that’s after the node yields have been improved via the gazillion iPhone SoC dies. NVIDIAs flexibility came from using some of those binned dies for GeForce cards, but the VRAM situation is clearly making that less important, as they’re cutting some of those SKUs for being too vram heavy relative to MSRP.
- wtallis 8mo ago> For Apple, they have binning flexibility, with Pro/Max/Ultra, all the way down to iPads The Pro and Max chips are different dies, and the Ultra currently isn't even the same generation as the Max. And the iPads have never used any of those larger dies. > NVIDIAs flexibility came from using some of those binned dies for GeForce cards NVIDIA's datacenter chips don't even have display outputs, and have little to no fixed-function graphics hardware (raster and raytracing units), and entirely different memory PHYs (none of NVIDIA's consumer cards have ever used HBM).
- seanmcdirmid 8mo agoThere are levels inside pro, max, and ultra that might be the product of binning?
- sgjohnson 8mo ago"Ultra" isn't even binned - it's just 2x "Max" chips connected together. Otherwise, yes, if a chip doesn't make M4 Max, it can make M4 Pro. If not, M4. If not, A18 Pro. If not that, A18. And even all of the above mentioned marketing names come in different core configurations. M4 Max can be 14 CPU Cores / 32 GPU cores, and it can also be 16 CPU cores and 40 GPU cores. So yeah, I'd agree that Apple has _extreme_ binning flexibility. It's likely also the reason why we got A19 / A19 Pro / M5 first, and we still don't have M5 Pro or M5 Max yet. Yields not high enough for M5 Max yet. Unfortunately I don't think they bin down even lower (say, to S chips used in Apple Watches), but maybe in the future they will. In retrospect, Apple ditching Intel was truly a gamechanging move. They didn't even have to troll everyone by putting an Intel i9 into a chassis that couldn't even cool an i7 to boost the comparison figures, but I guess they had to hedge their bet.
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- throwaway2037 8mo ago> They need mature yields (>90%) to make the unit economics of an iPhone work. Can you share how you know this information? >90% seems very specific.
- friendzis 8mo ago> They need mature yields (>90%) to make the unit economics of an iPhone work. Sauce on the number? iPhones are luxury goods with margins nowhere near typical for consumer electronics. Apple can easily stomach some short term price hikes / yield drops.
- DeathArrow 8mo agoAre Apple's profit margins lower than Nvidia's?