[S|A] Apple has a fab

[Idontcare]

I don't think Apple has their own fab, but at this point since they have both the chip volume and cash on hand to make it happen, I don't see why they don't build their on chip fabs. I know easier said than done, but they have the resources to move mountains if they wish.

Apple has cash because they have, to date, been smart enough to avoid getting into capital intensive production and manufacturing.

Being vertically integrated (an IDM, i.e. owning your fabs) is not a path to riches unless you also happen to be able to operate as a virtual monopoly on the products you are selling.

 

[ShintaiDK]

If anything, Apple would get an assembly plant for the finished components instead of outsourcing it to Foxconn and the likes. But again, what happens when your product is in full decline like its iPhone currently is.

I just dont see any positive business position for Apple to do anything relating to fabs.

As IDC also writes, its a sure path of losing money.

 

[joshhedge]

If anything, Apple would get an assembly plant for the finished components instead of outsourcing it to Foxconn and the likes. But again, what happens when your product is in full decline like its iPhone currently is.

I just dont see any positive business position for Apple to do anything relating to fabs.

As IDC also writes, its a sure path of losing money.

I'm pretty sure I recently saw some US market share statistics which showed that the iPhone is growing faster in the states than even Android…

 

[ShintaiDK]

I'm pretty sure I recently saw some US market share statistics which showed that the iPhone is growing faster in the states than even Android…

Is that why we see this?
http://vr-zone.com/articles/verizon-might-have-to-pay-apple-14b-as-iphone-sales-slow-down/44989.html

In Europe its already over:

 

[joshhedge]

Is that why we see this?
http://vr-zone.com/articles/verizon-might-have-to-pay-apple-14b-as-iphone-sales-slow-down/44989.html

In Europe its already over:

Hmm, I'll try and find the source.

My apologies, it was just quoting T-Mobile USA smartphone sales - http://www.macrumors.com/2013/07/08...as-carrier-expansion-drives-growth-for-apple/

 

[joshhedge]

Apparently Samsung is going to be producing 14nm A9 chips for Apple from 2015 according to a new report from The Korea Economic Daily..

http://english.hankyung.com/news/apps/news.view?c1=&newscate=1&nkey=201307150718011

 

[Exophase]

Wow, I had no idea Apple had purchase commitments. Guess that explains why not all carriers offer them. And if they really make Verizon pay $14B out of pocket you can expect that number of carriers to drop.

 

[Silverforce11]

Apple has cash because they have, to date, been smart enough to avoid getting into capital intensive production and manufacturing.

Being vertically integrated (an IDM, i.e. owning your fabs) is not a path to riches unless you also happen to be able to operate as a virtual monopoly on the products you are selling.

Samsung is vertically integrated and always looking for expansion opportunities, especially in sectors that require MASSIVE capital investment.

 

[blckgrffn]

Samsung is vertically integrated and always looking for expansion opportunities, especially in sectors that require MASSIVE capital investment.

"Barriers to entry" can work both ways.

A smart company knows which side they are on for the long run and makes decisions accordingly

 

[Jimzz]

Apparently Samsung is going to be producing 14nm A9 chips for Apple from 2015 according to a new report from The Korea Economic Daily..

http://english.hankyung.com/news/apps/news.view?c1=&newscate=1&nkey=201307150718011

? I thought apple and samsung hated each other and apple dumped samsung and jumped to TSMC? Guess money heals all.

 

[Shlong]

? I thought apple and samsung hated each other and apple dumped samsung and jumped to TSMC? Guess money heals all.

Samsung can get to 14nm at a scale that Apple needs faster than TSMC, that's most likely the main reason (plus offer a better deal).

 

[Khato]

Samsung can get to 14nm at a scale that Apple needs faster than TSMC, that's most likely the main reason (plus offer a better deal).

I'd imagine that offering a better deal would be the primary motivation. Since GlobalFoundries, Samsung, and TSMC all have equally optimistic schedules regarding their FinFET process timetables. (As of yet I've seen nothing to indicate that they're not all taking the same approach for this 'node' of 20nm BEOL + FinFET, aka, not really 14nm.)

 

[wilds]

These rumors keep the mill running!
http://finance.yahoo.com/q?s=UMC

Time to buy some UMC stock?

 

[PPB]

Their new paywall mechanism is also to throw off some sites that usually take the information from them. Using hoax tags behind those articles usually is the way they roll nowadays.

Knowing this, I woudnt a penny's worth of an UMC stock. Probably a hoax just to throw non-paying readers and parasitic tech sites off.

 

[Idontcare]

Their new paywall mechanism is also to throw off some sites that usually take the information from them. Using hoax tags behind those articles usually is the way they roll nowadays.

Knowing this, I woudnt a penny's worth of an UMC stock. Probably a hoax just to throw non-paying readers and parasitic tech sites off.

To be fair here, Charlie's site itself is a parasitic tech site too.

True it doesn't leach off of other tech sites, it isn't a cannibalistic parasite, but the very source of the info that goes into the articles is that of confidential (to the business in question) info that has intrinsic value (otherwise insider trading would not be a legal issue) for which the business itself does not want made public (otherwise they'd release an official PR about it).

So what the paywall really is about is that Charlie wants to make money off of other people's hard work (the hard work done by Apple's negotiators in this instance) but he doesn't want anyone else making money off of those people's hard work.

Charlie doesn't add any value to the thing being sold here (the "thing" being information that has value because it communicates what someone else has accomplished or is intending to accomplish), he is the parasite in the equation, but yes he uses a paywall to fend off other parasites because there is no honor among thieves.

Charlie having a paywall is no different than if the pirate bay put up a paywall to keep other pirates from copying their pirated goods.

 

[NTMBK]

Charlie doesn't add any value to the thing being sold here (the "thing" being information that has value because it communicates what someone else has accomplished or is intending to accomplish), he is the parasite in the equation, but yes he uses a paywall to fend off other parasites because there is no honor among thieves.

Charlie having a paywall is no different than if the pirate bay put up a paywall to keep other pirates from copying their pirated goods.

Nah man, Charlie is like the Edward Snowden of tech. :awe:

Seriously though, he provides information to outsiders (like myself) who would never normally have any source for that. Given the semi-accurate nature of his leaks, I wouldn't gamble my livelihood on it, but I liked it for curiousity and entertainment value- and for using in internet forum debates/arguments. Just not enough to pay $100 for it. (Plus even if I did I still wouldn't be able to use it in arguments, as the people I am arguing with wouldn't be able to see behind the paywall anyway...)

 

[tviceman]

Apple has cash because they have, to date, been smart enough to avoid getting into capital intensive production and manufacturing.

Being vertically integrated (an IDM, i.e. owning your fabs) is not a path to riches unless you also happen to be able to operate as a virtual monopoly on the products you are selling.

I'm not saying that Apple has a monopoly in anything, but the sheer amount of volume they churn out each year in iPods, iPads, and iPhones is enough of an excuse for them to go into the fab business. The rumors have persisted they'll eventually move their macbooks to ARM processors once performance is good enough (which makes sense as it would give their entire product line backwards compatibility from a hardware standpoint), which would further increase the volume.

Makes me wonder...Does apple sell more iPads, iPods, Macs, and iPhones combined than Intel sells CPU's nowadays?

 

[PPB]

To be fair here, Charlie's site itself is a parasitic tech site too.

True it doesn't leach off of other tech sites, it isn't a cannibalistic parasite, but the very source of the info that goes into the articles is that of confidential (to the business in question) info that has intrinsic value (otherwise insider trading would not be a legal issue) for which the business itself does not want made public (otherwise they'd release an official PR about it).

So what the paywall really is about is that Charlie wants to make money off of other people's hard work (the hard work done by Apple's negotiators in this instance) but he doesn't want anyone else making money off of those people's hard work.

Charlie doesn't add any value to the thing being sold here (the "thing" being information that has value because it communicates what someone else has accomplished or is intending to accomplish), he is the parasite in the equation, but yes he uses a paywall to fend off other parasites because there is no honor among thieves.

Charlie having a paywall is no different than if the pirate bay put up a paywall to keep other pirates from copying their pirated goods.

Well, TBH you went into great lengths in this post just to paint him in a bad light. In your line of tought we can also say any kind of journalism is parasitic as everyone of them lives off newsworthy material and the protagonists involving those stories. Criminal Journalism is in it's root a cynical profession :biggrin:

The dude has a personal crusade with the Inquirer, for example, even dedicating a couple articles about their "plagiarism". So in that sense I understand his site's new MO and paywall thingy. He uses it to throw off sites who ironically have a better reputation than his (I guess labeling your site as Semi-Accurate is kind of a asumed disclaimer), sometimes to the length of using hoaxes in his article's tags. It seems to work at some point, considering the Apple-Centered news sites cited in this thread didn't doubt to base their stories off that UMC tag.

 

[Soleron]

Nah man, Charlie is like the Edward Snowden of tech. :awe:

Seriously though, he provides information to outsiders (like myself) who would never normally have any source for that. Given the semi-accurate nature of his leaks, I wouldn't gamble my livelihood on it, but I liked it for curiousity and entertainment value- and for using in internet forum debates/arguments. Just not enough to pay $100 for it. (Plus even if I did I still wouldn't be able to use it in arguments, as the people I am arguing with wouldn't be able to see behind the paywall anyway...)

Not yourself, because as you say you wouldn't pay the $100. If you've noticed, no real info is without a paywall on his site now (wasn't true when the wall first started).

It's like if Snowden was selling proof to any world embassy who could pay, that the US was spying on them.

 

[Soleron]

CNET reports Charlie's article says Global Foundries

Yeah the irony is that the paywall doesn't stop plagarism, because journalists can afford to pay the $100/$1000 but normal readers cannot.

 

[Idontcare]

I'm not saying that Apple has a monopoly in anything, but the sheer amount of volume they churn out each year in iPods, iPads, and iPhones is enough of an excuse for them to go into the fab business. The rumors have persisted they'll eventually move their macbooks to ARM processors once performance is good enough (which makes sense as it would give their entire product line backwards compatibility from a hardware standpoint), which would further increase the volume.

Makes me wonder...Does apple sell more iPads, iPods, Macs, and iPhones combined than Intel sells CPU's nowadays?

The economics of owning your own fab requires you to have a business that entails the production and continued sales of legacy products.

If Apple were to buy a fab that was equipped with all the required tools for 22nm production, that fab needs to still be producing 22nm chips 6-8 yrs later in order for the financials to make sense.

This is why a foundry owns the fab but the fabless customer does not. Apple is not about selling legacy products, they are about getting people to upgrade and feeling like their perfectly working 2nd generation iPad needs to be replaced with a spanking new 3rd generation iPad and so on.

A typical fab will add on new nodes to its production load as time goes on, but it rarely phases out the production of legacy nodes. For a foundry this is not an issue because there are always a supply of small fabless companies out there who trail the leading edge by 4 or 5 nodes for cost and complexity reasons.

But what would apple do with a 22nm production line in 6 yrs when they want to be have all their latest gizmos and gadgets using 7nm? If the conclusion is going to be "just shut down all 22nm production and requalify all the tools for 7nm production" then they may as well remain a fabless company that throws gobs of money at a foundry to ensure the foundry has the ramp-to-capacity that Apple needs.

(the economics there are in Apple's favor, they are not fab experts, they are gadget and software experts, the foundries are the fab experts)

To own a fab pretty much requires you to have a desire to have a product portfolio that entails producing legacy and lagging-edge products for years and years. This works for IDMs because they force themselves to adopt a business model that enables it - Intel and AMD getting into the chipset business for example, or foundries being able to support lagging-edge fabless companies, or businesses that do catalogue sales such as automotive or medical parts that need be produced for 10yrs or more.

Apple does not fit that mold currently.

Now maybe they have grand plans for a shift in their business strategy itself, and with that might come the opportunity to sell large volumes of legacy products for years and years down the road such that owning a fab begins to make economic sense?

 

[tviceman]

The economics of owning your own fab requires you to have a business that entails the production and continued sales of legacy products.

If Apple were to buy a fab that was equipped with all the required tools for 22nm production, that fab needs to still be producing 22nm chips 6-8 yrs later in order for the financials to make sense.

This is why a foundry owns the fab but the fabless customer does not. Apple is not about selling legacy products, they are about getting people to upgrade and feeling like their perfectly working 2nd generation iPad needs to be replaced with a spanking new 3rd generation iPad and so on.

A typical fab will add on new nodes to its production load as time goes on, but it rarely phases out the production of legacy nodes. For a foundry this is not an issue because there are always a supply of small fabless companies out there who trail the leading edge by 4 or 5 nodes for cost and complexity reasons.

But what would apple do with a 22nm production line in 6 yrs when they want to be have all their latest gizmos and gadgets using 7nm? If the conclusion is going to be "just shut down all 22nm production and requalify all the tools for 7nm production" then they may as well remain a fabless company that throws gobs of money at a foundry to ensure the foundry has the ramp-to-capacity that Apple needs.

(the economics there are in Apple's favor, they are not fab experts, they are gadget and software experts, the foundries are the fab experts)

To own a fab pretty much requires you to have a desire to have a product portfolio that entails producing legacy and lagging-edge products for years and years. This works for IDMs because they force themselves to adopt a business model that enables it - Intel and AMD getting into the chipset business for example, or foundries being able to support lagging-edge fabless companies, or businesses that do catalogue sales such as automotive or medical parts that need be produced for 10yrs or more.

Apple does not fit that mold currently.

Now maybe they have grand plans for a shift in their business strategy itself, and with that might come the opportunity to sell large volumes of legacy products for years and years down the road such that owning a fab begins to make economic sense?

I didn't realize all that. Does Intel still produce a large volume of chips on out-dated (6+ years old) processes or are they more of an anomaly? Between their SSD drives and CPU's, which they regularly EOL for newer models, it always seems like Intel is constantly pushing their biggest chip volumes to technologically current and advanced nodes. But then again I don't really know what the breakdown of Intel's different businesses are in terms of volume.

 

[Idontcare]

Well, TBH you went into great lengths in this post just to paint him in a bad light.

No.

I went to great lengths to ensure my position was clear and would create as minimal misunderstanding as possible.

Charlie's own actions are what paint him in a bad light.

He takes information that is of intangible value to a company (which is why they don't release it in PR) and he sells it to people who are willing to pay him for access to his ill-gotten goods.

If me calling a spade, a spade, is tantamount to "going to great lengths just to paint him in a bad light" then I'm going to have to disagree with you.

Ask Charlie if UMC's shareholders, or Apple's shareholders, deserve to have their stocks pumped-and-dumped just because he wants to make a buck or two off his paywall and his moles who have no problem betraying their employers by telling confidential information to Charlie.

There is no honor among thieves, and it isn't "painting in a bad light" to call out a thief when they flaunt fenced goods right in front of your face.

 

[Idontcare]

I didn't realize all that. Does Intel still produce a large volume of chips on out-dated (6+ years old) processes or are they more of an anomaly? Between their SSD drives and CPU's, which they regularly EOL for newer models, it always seems like Intel is constantly pushing their biggest chip volumes to technologically current and advanced nodes. But then again I don't really know what the breakdown of Intel's different businesses are in terms of volume.

If you look closely at the specific SKUs they EOL, they will EOL the high-ASP high-visibility SKUs because they want to migrate the demand for those products to the higher-margin opportunities that come with obsoleting the existing models (get those 2500k owners to upgrade to 4670k or get owners of older CPUs to upgrade to the higher margin 4670k instead of the lower margin 2500k) but they will keep on producing volumes of low-ASP chips for the emerging markets for years and years...plus chipsets and supporting ICs like thunderbolt and so on.

There is of course a general node migration cadence to the entire portfolio, but it is optimized to maximize the value that comes from a depreciated toolset and production line.

For example, just to put some numbers to it from a source of public info, TSMC still generates 29% of its entire revenue from the production of wafers on nodes 0.11um and larger (0.11um to 0.5um).

That is a lot of wafers still being produced on process nodes that have been in production for over a decade. That is what you need to be able to do with your fabs if you intend on owning your own fabs.

If you don't intend on maintaining production of dated process nodes then being an IDM just isn't for you, that is what being fabless is for.

 

[Soleron]

he wants to make a buck or two off his paywall and his moles who have no problem betraying their employers by telling confidential information to Charlie.

There is no honor among thieves, and it isn't "painting in a bad light" to call out a thief when they flaunt fenced goods right in front of your face.

He said directly that he doesn't pay sources for information. He wouldn't tell me why his sources tell him anything though.

Also your quote is above the 50th percentile in support for posts about him, because you do think he has actual sources with real info occasionally.