[lizknope]

I've been designing chips since 1997. The first 2 companies I was at had their own fabs. It's been a boom and bust industry for 50 years or more.

https://www.macrobusiness.com.au/2021/05/the-great-semicondu...

Here is a long article from last year about Sam Altman.

https://www.nytimes.com/2024/09/25/business/openai-plan-elec...

https://finance.yahoo.com/news/tsmc-rejects-podcasting-bro-s...

> TSMC’s leadership dismissed Altman as a “podcasting bro” and scoffed at his proposed $7 trillion plan to build 36 new chip manufacturing plants and AI data centers.

I thought it was ridiculous when I read it. I'm glad the fabs think he's crazy too. If he wants this then he can give them the money up front. But of course he doesn't have it.

After the dot com collapse my company's fabs were running at 50% capacity for a few years and losing money. In 2014 IBM paid Global Foundries $1.5 billion to take the fabs away. They didn't sell the fabs, they paid someone to take them away. The people who run TSMC are smart and don't want to invest $20-100 billion in new fabs that come online in 3-5 years just as the AI bubble bursts and demand collapses.

https://gf.com/gf-press-release/globalfoundries-acquire-ibms...

[Turfie]

Thanks for the insights. The 'podcasting bro' bit is hilarious.

I don't think demand will collapse though, since the Mag7 has the cash flow to spend, and they can monetize if the time's ripe.

What do you think?

[lizknope]

I started working during the dot com boom. I was getting 3 phone calls a week from recruiters on my work telephone number. Then I saw the bubble burst in from mid-2000. In 2001 zero recruiters called me. I hated my job after the reorg and it took me 10 months to find a new one.

I know a lot of people in the 45+ age range including many working on AI accelerators. We all think this is a bubble. The AI companies are not profitable right now for the prices they charge. There are a bunch of articles on this. If they raise prices too quickly to become profitable then demand will collapse. Eventually investors will want a return on their investment. I made a joke that we haven't reached the Pets.com phase of the bubble yet.