http://www.fool.com/investing/2016/07/18/taiwan-semiconductor-mfg-co-ltd-reportedly-wins-ap.aspx#.V40IKj7QShw.twitter
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TSMC's labor is 40%- that hands down is a deal breaker, and has been for a while. As long as we had a node lead, ect, ect we were ok. Now the science is harder, the veteran talent is leaving, the talent that's left is forced to expend some (valuable ) mental capital staying employed instead of focusing on the task at hand.
Because new Intel process technology s---s. Was designed by idiots.
Why? Apple volume alone for the apps processor exceeds the total intel x86 volume. As an IDM intel with it's own internal product priorities will always appear biased for both leading edge capacity and tpt for its own products. Intel internal x86 is far more profitable to run versus what either apple or Samsung likely charge Apple.
To compete for Apple intel would have to likely put in place double the capacity at say 10nm ( commit to outfitting the f42 shell ) and price the silicon far lower than similar capacity would produce for internal products. Imagine the stockholder revolt if intel doubled its capital investment and accepted between 30-40% GM reduction. BK would be BK'k both by the board and the employees as the stock would surely have to price the GM reduction. TSMC cost structure is lower than intel and their business has no internal conflict! TSMC whole mission is to provide the best silicon value agnostic to anyone and everyone, they are a "Foundry."
Call it innovators delma or simply the fundamental difference in business model. Intel will NEVER compete effectively in the Foundry space as an IDM nor Samsung as they have an internal bias to their special internal customers that a company like Apple won't trust. Global Foundries would also struggle bidding for Apple if it want behind as they will also favor AMD silicon.
Apple would accept to be single source to a precieve agnostic single supplier versus add intel. Intel can't provide enough volume or pricing w/o blowing its own price and value model. That is why intel foundry and the thousands the work in it are a wast of money and resources.
Intel needs to truly split and prove it is competitive and agnostic while also accepting lower margins for silicon or just fire the whole Custom Foundry group. I believe now that the recent TMG retirement has occurred the Foundry will be gone shortly as the remaining leaders have to see it for what it is. Or put it another way if Custom Foundry survive the 2017 with no major customers than it validates Intel management incompetence as their is simply no reason the internal foundry cost and revenue can justify such a large group doing nothing.
I challenge anyone to ask their custom foundry coworkers how and why intel should continue to keep those thousands while they generat what revenue. Ask you senior management and see if you accept their BK answer
We're screwed
Are you kidding? TSMC is much more cost effective than Intel, even the modem chip which support iPhone 7 will be manufactured by TSMC. Do you see the point here?