TSMC 90nm production schedules

You have some marginal cost and fixed cost. If you sold more the fixed cost is spread over all the chip sold, and thus increases the margin....

The fixed cost, to the IHV, is the cost per wafer - the higher the yeild per wafer, the more chips you can sell from that wafer, thus you are operating at a higher margin.

Btw, DT states that many clients are having issues with 0.13 micron.

It states that some source are having low yeild (75%-80% low?) with the newer 12 inch wafers - what about 8 inch?
 
Well, one question is, "Do ATI and NVidia use different design tools?"

I know that periodically, you hear press releases in which "ATI/NVidia is using the super-duper new design tools from company X/Y for their future designs on 0.13/0.09/whatever micron".

I remember back a few years that one of the excuses for the delay of the Voodoo5 was that their design tools reputedly 'broke'.

Could different design tools be a big factor in why some companies are having problems with TSMC's 0.13 micron process and why others claim to be OK?
 
DaveBaumann said:
The fixed cost, to the IHV, is the cost per wafer - the higher the yeild per wafer, the more chips you can sell from that wafer, thus you are operating at a higher margin.
Well, if you think that the fixed cost is just the wafer then, i think we don't work in the same planet. For me it's the marginal cost. The fixed cost is what you pay even if you don't produce 1 chip ;)
 
RussSchultz said:
ED: the "overhead" isn't included in gross margin.
Oh, i was speaking about operating margin. :oops:

Anyway, doesn' the increase of command of wafers decrease the price of 1 wafer? Ati has got a 25/35% increase of its market share in 1 year i think (from 18-20% to 24/25%). Moreover the shippment of 0.13 part didn't begin before the end of the last quarter. So?

Finally, didn't DT say that the yield was also poor on 9600 also?
 
The "cost per wafer" is definitely not a fixed cost.

However there are other issues outside of fab cost at work here.

For example: I use the dell-o-meter. If you pull up dells site you’ll see it offers ATI products for the mid and high-performance cards and nvidia (GF4-MX) for the value segment.

It’s my guess that Nvidia’s sales have shifted in the last year from mid to high range products to more low range products. I assume they are getting squeezed out of the sweet spot (middle) of the market which is hurting their margins. Where as ATI is making gains in the sweet spot.

So even if 130nm at TSMC is producing poor yields for both ATI and Nvidia their margins could be moving in the opposite direction.
 
Evildeus said:
And? The market share of Ati is expanding, whereas the Nv's one is at best equal. I don't know what are the contracts between Ati and TSMC, but even if the margin is equal, when your operational cost is a given and you sell more, your financial margin needs to go higher, you can't tell if the way the financial margin of Ati is moving comes from the market share gain or the better yield, or both or anything else.

nVidia has said more than once this year itself that it was having .13 micron yield problems--so the information has been readily apparent for months.

Check this story out...

http://www.siliconstrategies.com/ar...OOWXIGUQSNDBCCKH0CJUMEYJVN?articleId=12803413

Here's a quote:

"Another analyst believes the problems may reside at Nvidia--not TSMC. "The low yields on Nvidia's GPUs are largely due to its 'exotic' designs. Nvidia is known for its aggressive designs, but it is extremely weak in communicating its ideas to the foundries," according to one analyst. "The bottom line is that Nvidia's devices are driving everyone crazy in the foundry business.""

Even the analysts are finally figuring it out....nVidia's been "foundry dependent" for a long time--some design problems even the best foundries can't solve.

The differences within TSMC for .13 microns for ATi and nVidia have been well documented by both companies for several months. ATi say it has no complaints, nVidia's complained. Two different companies, two (or more) different chip designs, same foundry. Seems cut & dried.
 
Well, one question is, "Do ATI and NVidia use different design tools?"

They probably do. If you do a search for "ATI" and "Nvidia" at Cadence and Synopsys's website, you get some hits. Unfortunately, the scattered sketchy info doesn't prove ATI/Nvidia currently use different flows...only that future products are earmarked for certain design tools.

"Nvidia is known for its aggressive designs, but it is extremely weak in communicating its ideas to the foundries,"

I find this quote extremely ironic.

For one thing, as pure-play foundries, TSMC/UMC offer the least design-consulting services of all merchant foundries. There is no need for the fab-customer to interact with the foundry about his/her design (unless he wants some specific advice.) Customers simply download TSMC's design-kit and are expected to have the requisite CAD-tools and know-how to produce a GDSII file. The customer hands the foundry a GDSII file (electronic mask photograph), the foundry runs the design through an automated DRC (design rule check), then off it goes to the production floor. If the DRC fails, the foundry will notify the customer, who has the option to 'sign off' (i.e. approve production, accept all risks) or hold back.

Also, NVidia's new foundry partner, IBM, is well-known (among disgruntled ex-customers) for not communicating well, or not caring to communicate, with its ex-foundry customers. In fairness, IBM's three recent *major* design wins (NVidia, Xilinx, and one other company I can't think of) shows IBM's new dedication to the merchant-foundry business. In the past, every design had to move through IBM's internal P&R design services group, which customers affectionately called a 'black box', because no one knew what went on inside that group...the customer could only see the input and output.

IBM allowing external third-party CAD-tools handle back-end place&route/layout is a recent event. Here's an interview talking about the pluses and minuses of an internal tool flow http://www.eedesign.com/features/exclusive/OEG20020122S0072. Ironically, as time goes on, NRE costs are skyrocketing for fabless companies. One way for customers to reduce the huge upfront dev cost is to handoff the backend work to the foundry. Customer pays a higher price/wafer, but the third-party back-end tools (like Cadence's SOC Encounter, Synopsys' Galaxy) are now well over $1.5M.

> The differences within TSMC for .13 microns for ATi and nVidia have been well documented by both companies for several months.

ATI and NVidia could be using different product-lines. TSMC offers several different foundry-products at the 0.13u node, and according to this article http://www.eetimes.com/semi/news/OEG20030729S0018, yield varies quite a bit. There are many complex variables that go into final manufacturing yield. Some are controlled by the customer (# metal-layers, die-size, foundry recipe), some aren't (variability in the manufacturing line, accuracy of the development library, etc.)

After so many months of difficulty with TSMC, one certainly expects a customer (NVidia) to change the way it does things in order to accomodate previously unforeseen obstacles. Fixing 1 exotic design with another equally exotic design is just begging for a history-repeat lesson.
 
asicnewbie said:
Also, NVidia's new foundry partner, IBM, is well-known (among disgruntled ex-customers) for not communicating well, or not caring to communicate, with its ex-foundry customers.

nVidia's is in a different position for that though. They got money. And IBM likes money ( read: nVidia is paying IBM for privileges and to boost R&D in some specific areas )


Uttar
 
are you implying IBM's ex foundry customers didn't have money and didn't pay IBM?

no wonder they're "ex" customers

LOL...no! IBM's family jewels, the server CPUs and other advanced ICs, require a very advanced foundry to support. As such, their IBM's foundry business is best suited for niche customers looking for leading-edge tech (i.e. spare no expense.) The 'average Joe customer' is more interested in wafer-pricing, time to market (turnaround time), and capacity guarantees. These are areas IBM refused to negotiate. Quite simply, it's much more profitable to fab as many PowerPC CPUs as the market can bear, versus fabbing wafers for customers. For any IDM (integrated device manufacturer) company, selling (in-company) finished IC-products is more profitable than selling processed wafers.

The old IBM's wafer foundry charged lots more than the other merchant foundries. As an IBM customer, you're effectively bidding against IBM's internal divisions, and microprocessors typically sell for a handsome markup. Then, because the old IBM didn't believe in supporting third-party back-end P&R tools, old customers were 100% reliant on IBM's foundry design-services. Again, for access to the design-servces group you competed against IBM's internal divisions and tier-1 customers. According to my coworkers (who know people who've dealt with the old IBM), if you delivered your netlist on time, IBM would usually complete the P&R on schedule. If you delivered tardy, or delivered a defective netlist (i.e. forgot to meet very checkpoint on IBM's customer-handoff checklist), IBM would bump your schedule by +3-6 months -- you didn't meet the original schedule, tough luck. And capacity guarantees? Quite simply, I don't think IBM had the surplus capacity to make any sort of *guarantees* to potential foundry customers. Fabless customers hate that. You know how most PC-geeks only need 1-2 drive bays, but all the same will prefer a spacious case with 5 drive-bays for 'future expansion'? Apparently, many fab-customers think the same way.
 
DaveBaumann said:
Well, the financials are telling that story. The one that is saying the yeilds are good have rising margins, while the one saying yeilds are bad have falling margins - and they are both paying per wafer...

Actually, in an interview with an NVIDIA suit some time back they publically stated that NVIDIA pays TSMC on a "per-working-chip" basis. Wish I could find the link, but I have absolutely no idea where to start looking :( (this was said to counter investor criticism wrt the low yields on .13 NV3x chips)
 
zurich said:
DaveBaumann said:
Well, the financials are telling that story. The one that is saying the yeilds are good have rising margins, while the one saying yeilds are bad have falling margins - and they are both paying per wafer...

Actually, in an interview with an NVIDIA suit some time back they publically stated that NVIDIA pays TSMC on a "per-working-chip" basis. Wish I could find the link, but I have absolutely no idea where to start looking :( (this was said to counter investor criticism wrt the low yields on .13 NV3x chips)

Yep, I remember that too. nVidia stated that they are the *ONLY* TSMC partner which shared the risks with the fab, instead of taking all of them.
So they pay on a per-working-chip basis, instead of a per-wafer basis.

Now that they got IBM as a foundry too, it's likely they'll "renegociate" that deal a day or another...


Uttar
 
Are we talking 'fixed cost' as in overhead? Or fixed price?

In general, the price of a wafer is "mostly" fixed. However:
-many times an automatic cost reduction schedule is in place (price of wafer is set to fall x% per month)
-It does get renegotiated over time, especially when volume exceeds or fails to meet forcast amounts.
 
Well, i'm talking of fixed cost in an micro-economic (and neoclassical) point of view, meaning, cost that exists even if you don't produce any good. Thus the marginal cost is the cost per chip produced (the cost of the wafer in Ati case i supposed).

Don't forget also that the wafer's price depends on the production of goods (ie chips), and the quantity change the price of the wafer to my understanding (ie if you buy 2 wafer or 2 millions, you won't pay the same price).

Finally, as the 0.13 parts is new and a small part of Ati business in the last quarter, we will see in the next how the marginal cost (for me the cost per chip produced) changes, then we will be able to make a beginning of assumptions. Even then, we will need to have the general figures (ie %age of 0.13 parts, 0.15 parts, making the assumption that on 0.15 cost per chip is unchanged), to be able to see if the margin on 0.13 parts is that great.
 
Waxing philosophical about whether a wafer is a fixed cost or a marginal cost...it falls somewhere in between. Its a "fixed" cost for that wafer and for the chips that comes off it (you generally can't make 'half a wafer'), but in the quantities we're talking its obviously a marginal cost.
 
I hate to get flamed, but is it possible that ATI just got lucky? Or Nvidia just got unlucky, i.e. neither really knew in advance that their design would work well or have problems. So Nvidia only found out later that it would and by that time did not want to deal with it since, as I heard also they pay tsmc on a per working chip basis as well?

I am basically saying that now perhaps companies will remain more flexible in their design until they get silicon back that promises to come at high yields.
 
Yep, I remember that too. nVidia stated that they are the *ONLY* TSMC partner which shared the risks with the fab, instead of taking all of them.
So they pay on a per-working-chip basis, instead of a per-wafer basis.

Wow, thanks for the head-up. I did not know that and come to think of it...I guess it shows that if you have a LOT of money and a good relationship with another company, you can work out a special arrangement.

Come to think of it, IBM and UMC has been fabbing engineering samples of some Xilinx FPGAs at 90nm. The parts have already reached customer hands (according to comp.arch.fpga.) I remember reading a while back that Xilinx signed some kind of cross-licensing agreement with IBM, allowing IBM to offer Xilinx's FPGA-technology in its ASIC product-line. (In other words, IBM will offer FPGA-IPs in its ASIC portfolio.) When I asked my boss whether 90nm was ready for 'primetime', he said NO, and I showed him the Xilinx press-release, he just rolled his eyes and said "That's just two elite companies doing elite things under a special cross-licensing arrangement. Not even close to a normal wafer for cash contract."

Now that they got IBM as a foundry too, it's likely they'll "renegociate" that deal a day or another...

...One can only wonder what kind of special deal (if any) NVidia and IBM have worked out.

Back to the topic of 90nm production schedules, here's an article stating that UMC is planning to aggressively pursue TSMC accounts. (As if UMC hasn't been already doing that!)
http://www.eetimes.com/story/OEG20030721S0018 - UMC chief reaches out to designers
 
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