In 2019, all the fabs combined made $X chips per year, and projected a growth of $delta_X for the next year.
By the end of 2020, $X + $delta_X is significantly less than the actual demand.
There are only three possible expectations:
1. The fabs made less than $X + $delta_X chips
2. There has been an explosive growth in sales of existing electronic devices exceeding $delta_X that either surprised the OEMs or that OEMs failed to communicate to the chip fabs by booking extra capacity in advance.
3. All fabs are not equally equipped to handle fab demand. If an OEM changes to a different fab vendor:
3.a. Some other OEM was denied capacity at the new vendor
3.b. The capacity that was opened up at the old vendor isn't usable by the OEM that got dropped by the new vendor
Has anyone done a deep dive and done the math to see how much capacity shortage was due to #1 and #2?
Apple famously moved a huge amount of their chips from Intel to TSMC when they made the m1 Mac. Intel has traditionally only used their fabs to make their own chips - so the OEMs that got dropped at TSMC couldn't just take their business to Intel to rebalance the available fab capacity.
Does the amount of m1 macs made/sold help explain the difference that #1 and #2 can not explain?
Is there another equally interesting story in the chip fab business that would explain this shortage?
I don't get it.
My mental model is this:
In 2019, all the fabs combined made $X chips per year, and projected a growth of $delta_X for the next year.
By the end of 2020, $X + $delta_X is significantly less than the actual demand.
There are only three possible expectations:
1. The fabs made less than $X + $delta_X chips
2. There has been an explosive growth in sales of existing electronic devices exceeding $delta_X that either surprised the OEMs or that OEMs failed to communicate to the chip fabs by booking extra capacity in advance.
3. All fabs are not equally equipped to handle fab demand. If an OEM changes to a different fab vendor:
3.a. Some other OEM was denied capacity at the new vendor
3.b. The capacity that was opened up at the old vendor isn't usable by the OEM that got dropped by the new vendor
Has anyone done a deep dive and done the math to see how much capacity shortage was due to #1 and #2?
Apple famously moved a huge amount of their chips from Intel to TSMC when they made the m1 Mac. Intel has traditionally only used their fabs to make their own chips - so the OEMs that got dropped at TSMC couldn't just take their business to Intel to rebalance the available fab capacity.
Does the amount of m1 macs made/sold help explain the difference that #1 and #2 can not explain?
Is there another equally interesting story in the chip fab business that would explain this shortage?