Nvidia unhappy with TSMC wafer prices

From the pixels, bits, and shaders to the graphic cards that power them. Discuss the latest from AMD and NVIDIA here.

Moderators: morphine, SecretSquirrel

Nvidia unhappy with TSMC wafer prices

Postposted on Tue Mar 27, 2012 2:04 pm

http://www.extremetech.com/computing/12 ... -worthless

You can kinda ignore the article, and focus just on Nvidia slides. Apparently, the price of TSMC 20nm and 14nm wafers is going to be much higher than 28nm prices. In effect, even if you die shrunk your current chip from 28nm to 20nm, it will cost the same to manufacture it. This is quite dire if true, both for AMD and Nvidia. Thoughts?
codedivine
Gerbil Elite
Silver subscriber
 
 
Posts: 705
Joined: Sat Jan 24, 2009 8:13 am

Re: Nvidia unhappy with TSMC wafer prices

Postposted on Tue Mar 27, 2012 2:19 pm

codedivine wrote:http://www.extremetech.com/computing/123529-nvidia-deeply-unhappy-with-tsmc-claims-22nm-essentially-worthless

You can kinda ignore the article, and focus just on Nvidia slides. Apparently, the price of TSMC 20nm and 14nm wafers is going to be much higher than 28nm prices. In effect, even if you die shrunk your current chip from 28nm to 20nm, it will cost the same to manufacture it. This is quite dire if true, both for AMD and Nvidia. Thoughts?


I noticed the lack of price reuduction so the future does look grim. By the time we get to 14nm the very high end flagship will cost, what, $1000?
nVidia video drivers FAIL, click for more info
Disclaimer: All answers and suggestions are provided by an enthusiastic amateur and are therefore without warranty either explicit or implicit. Basically you use my suggestions at your own risk.
Arclight
Gerbil Elite
 
Posts: 696
Joined: Tue Feb 01, 2011 3:50 am

Re: Nvidia unhappy with TSMC wafer prices

Postposted on Tue Mar 27, 2012 2:23 pm

codedivine wrote:http://www.extremetech.com/computing/123529-nvidia-deeply-unhappy-with-tsmc-claims-22nm-essentially-worthless

You can kinda ignore the article, and focus just on Nvidia slides. Apparently, the price of TSMC 20nm and 14nm wafers is going to be much higher than 28nm prices. In effect, even if you die shrunk your current chip from 28nm to 20nm, it will cost the same to manufacture it. This is quite dire if true, both for AMD and Nvidia. Thoughts?

AMD and Nvidia aren't passing on any savings to the customer and now they're tasting their own medicine.
flip-mode
Gerbil Khan
Silver subscriber
 
 
Posts: 9084
Joined: Thu May 08, 2003 12:42 pm
Location: Cincinnati, OH

Re: Nvidia unhappy with TSMC wafer prices

Postposted on Tue Mar 27, 2012 2:38 pm

A little bit of information is probably necessary to fully understand what's going on here. Unfortunately, I don't have all of that information since I am a VLSI design engineer and not a process engineer. What I can say for certain is that new processes are becoming much more expensive than the old ones.

For example, when Intel added High K Metal Gates (HKMG) to their process (Penryn) that required them to change some of their manufacturing process. Metal gates will melt during traditional thermal oxidation steps, so new techniques had to be developed. These new techniques are more time consuming and expensive to do. This increases the price of a wafer that uses this process relative to previous processes.

A lot of people don't understand the very serious obstacles involved in process shrinking these days. Things were easy for a couple of decades, but ever since we've started using process nodes with features smaller than the light used to draw them, things have become very difficult.

I wouldn't worry too much about nVidia or AMD passing on the price increase too much. Keep in mind that the actual cost for chips is fairly low, assuming decent yields. If that cost doubles, then nVidia's total cost to make these chips might increase by 20%. nVidia's largest expense is probably its payroll.
"TORTURIS EXUVIAS EUNT"
Phenom X6 1090T @ 3.2 GHz
Sapphire Radeon 6950
TurtlePerson2
Graphmaster Gerbil
 
Posts: 1097
Joined: Sat May 26, 2007 9:08 am
Location: Plano, Texas

Re: Nvidia unhappy with TSMC wafer prices

Postposted on Tue Mar 27, 2012 2:40 pm

flip-mode wrote:AMD and Nvidia aren't passing on any savings to the customer and now they're tasting their own medicine.

I don't understand this sentiment. Why should companies pass savings to consumers? Companies should price their products as the market dictates. There's no reason that you deserve a cheap video card anymore than an employee deserves a bonus or a stockholder deserves a dividend. The few exceptions to this rule are already regulated by government (food prices, rent controls, etc.)
"TORTURIS EXUVIAS EUNT"
Phenom X6 1090T @ 3.2 GHz
Sapphire Radeon 6950
TurtlePerson2
Graphmaster Gerbil
 
Posts: 1097
Joined: Sat May 26, 2007 9:08 am
Location: Plano, Texas

Re: Nvidia unhappy with TSMC wafer prices

Postposted on Tue Mar 27, 2012 2:50 pm

TurtlePerson2 wrote:
flip-mode wrote:AMD and Nvidia aren't passing on any savings to the customer and now they're tasting their own medicine.

I don't understand this sentiment. Why should companies pass savings to consumers? Companies should price their products as the market dictates. There's no reason that you deserve a cheap video card anymore than an employee deserves a bonus or a stockholder deserves a dividend. The few exceptions to this rule are already regulated by government (food prices, rent controls, etc.)


Well said. They are in business to make a tidy profit, so I see nothing wrong with selling a luxury, not a necessity, at some level of markup.
Intel i5 2500K@4.3, Gigabyte Z68XP-UD3-iSSD, Zotax GTX580, 2x WD Caviar Black 1TB (RAID-0), Thermaltake Level 10 GT Snow Ed, Corsair H80, Win 7 Pro
Walkintarget
Gerbil Team Leader
 
Posts: 226
Joined: Tue Jan 29, 2008 10:15 am

Re: Nvidia unhappy with TSMC wafer prices

Postposted on Tue Mar 27, 2012 2:53 pm

flip-mode wrote:AMD and Nvidia aren't passing on any savings to the customer and now they're tasting their own medicine.


I too am going to take a little stab at this statement. From a personal and customer-centric point of view I like this. Nothing like the thought of a little karma to put a smile on my face.

That being said, from a more neutral point of view, this is a sort of "7 fat cows, 7 lean cows" scenario for GPU makers. If they're about to get hit with higher prices, tighter times and budgets, then they'd best take in their harvest while things are plentiful and good.

If that means making use of any additional headroom to lower costs and keep prices high (or raise prices), well then yes, this forecast only justifies (economically) taking advantage of the fat cows while they can. Granted, the cows (that would be us) never really like it when they provide a boon to the farmers, but no one writes parables and prophecies from pro-cow points of view anyways :)
Sabina - i7-3930k | P9x79 Pro | PH-TC14PE w/ 2x TY-140 | 16GB DDR3-1600 1.25V | 2x Samsung 830 256GB | GTX680
Circe - Disconnected and Disconcerted
gbcrush
Gerbil Elite
Gold subscriber
 
 
Posts: 551
Joined: Mon Feb 21, 2005 12:36 pm

Re: Nvidia unhappy with TSMC wafer prices

Postposted on Tue Mar 27, 2012 3:34 pm

TurtlePerson2 wrote:
flip-mode wrote:AMD and Nvidia aren't passing on any savings to the customer and now they're tasting their own medicine.

I don't understand this sentiment. Why should companies pass savings to consumers? Companies should price their products as the market dictates. There's no reason that you deserve a cheap video card anymore than an employee deserves a bonus or a stockholder deserves a dividend. The few exceptions to this rule are already regulated by government (food prices, rent controls, etc.)
So, by the same logic, Nvidia and AMD don't deserve cheap chips. TSMC should keep the profit, and Nvidia and AMD get more complex chips for the same price.
flip-mode
Gerbil Khan
Silver subscriber
 
 
Posts: 9084
Joined: Thu May 08, 2003 12:42 pm
Location: Cincinnati, OH

Re: Nvidia unhappy with TSMC wafer prices

Postposted on Tue Mar 27, 2012 3:37 pm

Walkintarget wrote:
TurtlePerson2 wrote:
flip-mode wrote:AMD and Nvidia aren't passing on any savings to the customer and now they're tasting their own medicine.

I don't understand this sentiment. Why should companies pass savings to consumers? Companies should price their products as the market dictates. There's no reason that you deserve a cheap video card anymore than an employee deserves a bonus or a stockholder deserves a dividend. The few exceptions to this rule are already regulated by government (food prices, rent controls, etc.)


Well said. They are in business to make a tidy profit, so I see nothing wrong with selling a luxury, not a necessity, at some level of markup.

Again, same goes for TSMC. TSMC is under no obligation to make things cheaper for Nvidia, so why is Nvidia "mad"? Are people understanding my argument here? I'm just pointing out Nvidia is mad that TSMC is about to treat Nvidia the way Nvidia treats its customers....
flip-mode
Gerbil Khan
Silver subscriber
 
 
Posts: 9084
Joined: Thu May 08, 2003 12:42 pm
Location: Cincinnati, OH

Re: Nvidia unhappy with TSMC wafer prices

Postposted on Tue Mar 27, 2012 3:46 pm

gbcrush wrote:That being said, from a more neutral point of view, this is a sort of "7 fat cows, 7 lean cows" scenario for GPU makers.

Congratulations for posting the most obscure biblical reference I've ever seen on TR.
"TORTURIS EXUVIAS EUNT"
Phenom X6 1090T @ 3.2 GHz
Sapphire Radeon 6950
TurtlePerson2
Graphmaster Gerbil
 
Posts: 1097
Joined: Sat May 26, 2007 9:08 am
Location: Plano, Texas

Re: Nvidia unhappy with TSMC wafer prices

Postposted on Tue Mar 27, 2012 3:49 pm

It's not a zero-sum game. There are win-win scenarios where both parties in a transaction can benefit. It is not to NVidia's long-term advantage to make TSMC completely unprofitable.

In a free market, pricing is set at the intersection of the supply and demand curves. In the case of semiconductor fabricators the market isn't completely free. There are design rule differences that pose a hurdle to NVidia leaving TSMC and taking their designs to another fabricator (because they'd have to re-design some of the details of their chips to work on the competitor's fabrication process). There are also capacity and process capability advantages at TSMC that pose hurdles for competitors like UMC, SMI or Global Foundries to being able to supply NVidia's needs.
JustAnEngineer
Gerbil God
Gold subscriber
 
 
Posts: 15440
Joined: Sat Jan 26, 2002 7:00 pm
Location: The Heart of Dixie

Re: Nvidia unhappy with TSMC wafer prices

Postposted on Tue Mar 27, 2012 4:35 pm

I agree with TurtlePerson2 that it is partly unavoidable. With every process generation, R&D costs are going up substantially.
codedivine
Gerbil Elite
Silver subscriber
 
 
Posts: 705
Joined: Sat Jan 24, 2009 8:13 am

Re: Nvidia unhappy with TSMC wafer prices

Postposted on Tue Mar 27, 2012 8:47 pm

Turtle, a question: are they still using polymer resists? Are resists one of the major things holding back scaling down?
cegras
Gerbil
Silver subscriber
 
 
Posts: 90
Joined: Mon Nov 05, 2007 3:12 pm

Re: Nvidia unhappy with TSMC wafer prices

Postposted on Wed Mar 28, 2012 7:18 am

cegras wrote:Turtle, a question: are they still using polymer resists? Are resists one of the major things holding back scaling down?


Not as far as I know. Of all the issues about scaling I hear at work, resist is not one of them. Masks and the photo-lithography process are certainly an issue, but it's due to issues with the behavior of "light" and the sharpness of the exposed image. I also hear the normal "gate leakage" and other complaints related to the physics of such small features. That said, like Turtle, I don't have much exposure to the processes guys. I am mainly around the design engineers.

--SS
SecretSquirrel
Gerbil Jedi
Gold subscriber
 
 
Posts: 1717
Joined: Tue Jan 01, 2002 7:00 pm
Location: The Colony, TX (Dallas suburb)

Re: Nvidia unhappy with TSMC wafer prices

Postposted on Wed Mar 28, 2012 9:13 am

It should be offset by quantity though?

I mean if you reduce a process from 28nm to 14nm (half the size), then theoretically, you could get four 14nm chips out of the same area of silicon as one 28nm chip.......in theory.

Say due to extra silicon defects, etc. your only able to get 2 chips instead of 4 chips, even if the costs of a wafer doubles, the cost of an individual chip should be about the same.

I am sure JAE will have something to add ;)
Life doesn't change after marriage, it changes after children!
anotherengineer
Gerbil Elite
 
Posts: 567
Joined: Fri Sep 25, 2009 1:53 pm
Location: Timmins, ON Canada, Yes I know, Up in the sticks

Re: Nvidia unhappy with TSMC wafer prices

Postposted on Wed Mar 28, 2012 9:50 am

Say due to extra silicon defects, etc. your only able to get 2 chips instead of 4 chips, even if the costs of a wafer doubles, the cost of an individual chip should be about the same.


Nvidia doesn't want it to be the same, that's part of why they are complaining. They want the new generation to be cheaper, so they can start making bigger DIEs and thus more powerful hardware up to the point where the DIE has the same relative size as it had before the shrink.

22nm and 14nm are insanely difficult from a design/manufacture PoV, I wouldn't really be surprised if current Yields are worse than your example.
The backbone of modern industrial society is, and for the foreseeable future will be, the use of electrical Power.
Ifalna
Gerbil
 
Posts: 51
Joined: Sat Jan 28, 2012 11:14 am
Location: Celestis

Re: Nvidia unhappy with TSMC wafer prices

Postposted on Wed Mar 28, 2012 9:57 am

TurtlePerson2 wrote:
gbcrush wrote:That being said, from a more neutral point of view, this is a sort of "7 fat cows, 7 lean cows" scenario for GPU makers.

Congratulations for posting the most obscure biblical reference I've ever seen on TR.


do I wins any internets?

I think I had originally pictured the ant and the grasshopper, but I don't know how many of us gerbils read that (or were read that) as a child. Plus, you know, they're cows. Once cows got in there, all I wanted to say was seven fat cows, and seven lean cows. :D
Sabina - i7-3930k | P9x79 Pro | PH-TC14PE w/ 2x TY-140 | 16GB DDR3-1600 1.25V | 2x Samsung 830 256GB | GTX680
Circe - Disconnected and Disconcerted
gbcrush
Gerbil Elite
Gold subscriber
 
 
Posts: 551
Joined: Mon Feb 21, 2005 12:36 pm

Re: Nvidia unhappy with TSMC wafer prices

Postposted on Wed Mar 28, 2012 11:26 am

do I wins any internets?


It sure made me chuckle, don't know whether that counts for anything though. :lol:
The backbone of modern industrial society is, and for the foreseeable future will be, the use of electrical Power.
Ifalna
Gerbil
 
Posts: 51
Joined: Sat Jan 28, 2012 11:14 am
Location: Celestis


Return to Graphics

Who is online

Users browsing this forum: No registered users and 8 guests