Comment by dmitrygr
Comment by dmitrygr 13 hours ago
Absolutely nobody stops you from forming a competing company and charging less for equally good or better results
Comment by dmitrygr 13 hours ago
Absolutely nobody stops you from forming a competing company and charging less for equally good or better results
Chip making has very has barrier of entry. Between fab cost and access to talent you are really not looking at an enticing business opportunity.
Free market is not as free as the name would imply.
Freedom refers to a potentiality. You are conflating a potential (freedom) for a hoped-for benefit (highly competitive). A free market is a means towards a competitive market because it lowers the artificial barriers to entry into the market. Those barriers imposed by the universe simply are and while we can invest into R&D and education, market forces cannot change the laws of physics.
> Freedom refers to a potentiality.
And tariffs and sanctions refer to what?
> A free market is a means towards a competitive market because it lowers the artificial barriers to entry into the market. Those barriers imposed by the universe simply are...
Are you talking about tariffs or about banning the sale of semiconductor equipment to China, so they can't compete in the market for high performance chips? Is that "a means towards a competitive market" or is it "barriers imposed by the universe"?
That's an interesting universe you live in.
High barriers to entry have nothing to do with free markets.
>In economics, a free market is an economic system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers.
https://en.wikipedia.org/wiki/Free_market
As long as a buyer and seller can negotiate whatever number they want, or walk away, it is a free market.
From just a bit further down in your link:
https://en.wikipedia.org/wiki/Free_market#Low_barriers_to_en...
I am not seeing the discrepancy:
> A free market does not directly require the existence of competition; however, it does require a framework that freely allows new market entrants. Hence, competition in a free market is a consequence of the conditions of a free market, including that market participants not be obstructed from following their profit motive.
The barriers to entry being referred to in the Wikipedia article are presumably government related. No government is stopping Intel or Samsung or any of the other chip makers from selling what TSMC sells, hence the “framework that freely allows new market entrants” is there.
And the subsequent paragraph seems to be exactly what is happening in the market of high end chips:
> Hence, competition in a free market is a consequence of the conditions of a free market, including that market participants not be obstructed from following their profit motive.
This is an overly simplistic view of what "free market" means in practice. The most obvious issue is that, in a free market economy, government protects private property, ensuring that any capitalistic definition of "free market" does, in fact, require government intervention into the expression of supply and demand.
And now that we've established that capitalism necessitates government intervention, capitalism is incompatible with such a simple definition of "free market." We can begin negotiating just how much government interference in the market is allowed before it's no longer a free market, but it's categorically impossible for a capitalistic free market to be pure expression of supply and demand.
Judging by the response to the parent come back, evidently TSMC deserves the high prices it will be charging. Why?
It's unrealistic to expect just anyone to start up a new fab. But if not one person among billions will start up a new fab it points to intrinsic difficulty or unpleasantness or lack of prestige in the task. A correctively high price has all kinds of advantages for the society.
I haven't seen any argument that difficult tasks shouldn't be priced high. Only name calling.
In this case its more its a 100+ billion investment to possibly produce a competing fab and its encumbered with many thousands if not more patents the likes of which will produce a minefield for any entrant. So far the silicon product market has just shrunk over the years with more and more failing to keep up with the latest process technology as the price of entrance and the patent warheads has risen.
Entering a multi billion risky market is no easy task even if you have investira and teams with deep knowledge. That's the reason monopolise should be avoided.
TSMC isn’t a monopoly, they are just better than all their competitors. Nothing forces you to buy TSMC; you can buy Intel, Samsung, SMIC, GlobalFoundries and various others.
This is getting faded out, but this is absolutely right. For very few use cases do you truly need the bleeding edge. So many things do not have such strict requirements, and will meet all necessary requirements on an older node. An ATTiny85 is still an incredibly useful microcontroller even today.
This monopoly is unavoidable due to the limited number of people in the world with the know-how to make these products, with the second constraint being that you need to risk $10B+ and 10+ years with a risk that you fail.
Edit: per link below, seems like you need $100B+ and 10+ years
For reference, TSMC's yearly capital investment budget is about $50B/year (https://www.taipeitimes.com/News/biz/archives/2025/03/07/200...)
This business is expensive, making and running fabs is way way more expensive than most anybody thinks. There are very few companies able to do it profitably.
EUV manufacturing is a loadbearing piece of geopolitical leverage at the highest echelons of power. The assertion that you can trivialize one of the most important bargaining chips in the world and no one will stop you might just be the most naive thing I've read all year.
Piddling sum in this domain, that amount won't even buy you enough for 1 production line, let alone where to put in, staff it and get all the necessary collateral to allow people to design to it.
And no amount of money will get you one of ASML EUV machines any time soon as the entire production line for the next handful of years has already been spoken for.
Except for me. I am single handedly holding off all of these people from building a fab.
Absolutely everything in the modern economy stops him from forming a competing company, this naive stupid market is the solution idea needs to stop being regurgitated, it's toxic to society.