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Nvidia reportedly spent $10 billion for a chunk of TSMC's 5nm manufacturing capacity

tusharngf

Member
2022-02-21-image-15-j.webp


Why it matters: Securing enough manufacturing capacity is going to be critical to the success of Nvidia’s RTX 4000 GPUs, which are expected to land as soon as this summer. The RTX 3000 series were regarded by gamers as paper launches, but the company is said to have paid through the nose so that wouldn’t be the case for its upcoming GPUs.

Back in November 2021, the rumor mill was abuzz with hints that Nvidia was planning to use TSMC’s 5nm process node for its upcoming GeForce RTX 4000 series (Ada Lovelace) GPUs. These are widely expected to be significantly faster and more power-hungry when compared to the current Ampere lineup, but a much bigger issue for the Jensen Huang-powered company is securing enough manufacturing capacity.

According to a report from Hardware Times, Nvidia is prepared to pay dearly for the ability to meet growing demand for increasingly powerful graphics cards. Specifically, it may be offering up to $10 billion to TSMC for a significant chunk of its 5nm manufacturing capacity. Other companies tapping TSMC’s N5 process node are Bitmain, AMD, and Apple.

Nvidia previously used Samsung’s 8nm process node to make Ampere GPUs, which are notorious for being power hungry. The company may have also dealt with relatively poor production yields when it comes to its RTX 3000 series GPUs, so moving to a smaller process node could help in that regard. However, TSMC’s 5nm wafers are expected to cost quite a bit more, which could translate into more expensive graphics cards.

Source: https://www.techspot.com/news/93490-nvidia-reportedly-spent-10-billion-chunk-tsmc-5nm.html
 

Elios83

Member
It seems like consoles won't be able to abandon 7nm anytime soon if they want to increase production.
I guess that going forward we'll see 7nm models still being the bulk of production plus a limited amount of consoles with 5nm internals to cut manufacturing costs.
Sony could shift the unprofitable digital edition to 5nm and keep the standard PS5 at 7nm for example.
I doubt we'll see price cuts anytime soon.
 

Panajev2001a

GAF's Pleasant Genius
TSMC is getting so much investment that if they manage to have decent margins and they play their cards right (and expand out of Taiwan too, for safety you know ;)) they will more than resist and actually repel Intel’s semiconductor push, which we need as having a single supplier without very strong competition is bad.
 

KungFucius

King Snowflake
This is ridiculous. Pay dearly? Really? If they weren't a fabless company they would be throwing billions into R&D for process development. They are a leading semiconductor company and they need to produce a leading quantity of semiconductor chips. This is the cost of doing business not a fine. It is a sign that they are successful and a good thing.
 

dcx4610

Member
Pretty funny that a full line of cards came and went without a lot of people getting to buy it. It'd be like getting having a PS4, the PS5 comes out, no one can find one for years and the PS6 comes. Oh wait...
 
I'm seriously concerned about the power draw requirements of this series. I'll be eyeballing the 4090 to finally upgrade my 1080 Ti but I only have an 850w PSU and that's barely cutting it with the 3090 and modern Intel CPUs.
 

ethomaz

Banned
TSMC capacity shares...

The big chunk: Apple
The second big chunk: nVidia
What left: AMD
What left from AMD: Sony
What left from AMD and Sony: Microsoft
 

hlm666

Member
If you look at the power efficiency going from samsung 8nm to tsmc 5nm if these things are using that much power the die is gonna have to be huge and they are gonna be a substantial performance improvement over current stuff. I find it hard to believe they will be able to shoot 850 watts into a 5nm gpu though.
 
TSMC capacity shares...

The big chunk: Apple
The second big chunk: nVidia
What left: AMD
What left from AMD: Sony
What left from AMD and Sony: Microsoft
This is an extremely reductive assessment. Especially considering Microsoft and Sony will be using 7nm/6nm for the foreseeable future.

5nm wafers ≠ 7nm wafers.

Nvidia is securing a large order of 5nm wafers not just for GeForce - they don't give a flying fuck about GeForce, a hefty chunk will probably be going to Grace and Hopper, their data centre CPU and GPU's respectively.

Make no mistake, the same will also apply to AMD. A significant chunk of their 5nm allotment will be going to Genoa and Bergamo DC CPUs and then their next Radeon Instinct cards, and then lastly for Ryzen and Radeon consumer.
Sony and Microsoft won't be playing with N5 or N4 for a couple years yet.
 

ethomaz

Banned
This is an extremely reductive assessment. Especially considering Microsoft and Sony will be using 7nm/6nm for the foreseeable future.

5nm wafers ≠ 7nm wafers.

Nvidia is securing a large order of 5nm wafers not just for GeForce - they don't give a flying fuck about GeForce, a hefty chunk will probably be going to Grace and Hopper, their data centre CPU and GPU's respectively.

Make no mistake, the same will also apply to AMD. A significant chunk of their 5nm allotment will be going to Genoa and Bergamo DC CPUs and then their next Radeon Instinct cards, and then lastly for Ryzen and Radeon consumer.
Sony and Microsoft won't be playing with N5 or N4 for a couple years yet.
Maybe...

Sony and Microsoft will probably move to a lower process in their consoles... it is basically a sure thing.
A shrink in the APU is a key part the console business for price cuts.
 
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winjer

Gold Member
Maybe...

Sony and Microsoft will probably move to a lower process in their consoles... it is basically a sure thing.
A shrink in the APU is a key part the console business for price cuts.

Consoles don't have the same profit margins, as other high end devices, to justify being on the latest process node. High-end GPUs and smartphone SoCs, can do this.
But it's much harder for consoles. Especially at a time of chip shortages and higher prices for almost all process nodes.

I bet we will see first a move to the 6nm process node. It's basically 7nm improved, so the switch can be done much easier. It's not as expensive as 5nm.
And it will reduce area, power consumption and heat output by a decent margin. Probably a 15% area reduction and a 10% reduction in power consumption.
 
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Elios83

Member
Maybe...

Sony and Microsoft will probably move to a lower process in their consoles... it is basically a sure thing.
A shrink in the APU is a key part the console business for price cuts.
Normally yes.
But in these circumstances the main issue is making more consoles.
Moving the whole production to 5nm doesn't make sense because they would face a lot of competition for allocations.
For Sony it makes sense to continue to make the standard PS5 at 7nm because it's already profitable, while it makes sense to move the Digital Edition to 5nm so that it becomes profitable and it's a smaller volume production so they won't fight for huge allocations.

This gen won't follow the usual tactics until the shortages situation is fully fixed, so I don’t expect price cuts or slim models anytime soon.
 
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2022-02-21-image-15-j.webp


Why it matters: Securing enough manufacturing capacity is going to be critical to the success of Nvidia’s RTX 4000 GPUs, which are expected to land as soon as this summer. The RTX 3000 series were regarded by gamers as paper launches, but the company is said to have paid through the nose so that wouldn’t be the case for its upcoming GPUs.

Back in November 2021, the rumor mill was abuzz with hints that Nvidia was planning to use TSMC’s 5nm process node for its upcoming GeForce RTX 4000 series (Ada Lovelace) GPUs. These are widely expected to be significantly faster and more power-hungry when compared to the current Ampere lineup, but a much bigger issue for the Jensen Huang-powered company is securing enough manufacturing capacity.

According to a report from Hardware Times, Nvidia is prepared to pay dearly for the ability to meet growing demand for increasingly powerful graphics cards. Specifically, it may be offering up to $10 billion to TSMC for a significant chunk of its 5nm manufacturing capacity. Other companies tapping TSMC’s N5 process node are Bitmain, AMD, and Apple.

Nvidia previously used Samsung’s 8nm process node to make Ampere GPUs, which are notorious for being power hungry. The company may have also dealt with relatively poor production yields when it comes to its RTX 3000 series GPUs, so moving to a smaller process node could help in that regard. However, TSMC’s 5nm wafers are expected to cost quite a bit more, which could translate into more expensive graphics cards.

Source: https://www.techspot.com/news/93490-nvidia-reportedly-spent-10-billion-chunk-tsmc-5nm.html

Something definitely seems to be lost in translation here, because I'm pretty sure TSMC customers can't just pay to be bumped to the front of the queue on a new process node. They make it sound like the corporate equivalent of bribery.

It's probably far more likely that this $10b is the engineering cost paid to TSMC to develop their new chip designs for the 5nm node, with the deal coming with a minimum guaranteed volume of fabbed chips on the node.
 
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Reallink

Member

There are 10's of millions of people happy to take your place and pay it. $2000 cards have been selling out in less than a second for nearly 2 calendar years. Those prices are actually too low for current market conditions.
 
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Zathalus

Member
TSMC capacity shares...

The big chunk: Apple
The second big chunk: nVidia
What left: AMD
What left from AMD: Sony
What left from AMD and Sony: Microsoft
I'm pretty sure Microsoft will be a much larger customer of 5nm then Sony will be. Not because of any console related reasons, but because of the upcoming ARM custom CPUs for Azure, to compete against AWS Graviton.
 

winjer

Gold Member
Normally yes.
But in these circumstances the main issue is making more consoles.
Moving the whole production to 5nm doesn't make sense because they would face a lot of competition for allocations.
For Sony it makes sense to continue to make the standard PS5 at 7nm because it's already profitable, while it makes sense to move the Digital Edition to 5nm so that it becomes profitable and it's a smaller volume production so they won't fight for huge allocations.

This gen won't follow the usual tactics until the shortages situation is fully fixed, so I don’t expect price cuts or slim models anytime soon.

N5 would not make the PS5 cheaper. It would make it more expensive.
An 300mm waffer in N5 costs more than double that of N7. But it only has a transistor density greater of 1.8
And it's yields are a bit lower. Probably 0.11 to .010 for N5. And 0.09 for N7.
 

Elios83

Member
N5 would not make the PS5 cheaper. It would make it more expensive.
An 300mm waffer in N5 costs more than double that of N7. But it only has a transistor density greater of 1.8
And it's yields are a bit lower. Probably 0.11 to .010 for N5. And 0.09 for N7.
Yeah they will choose the right moment to jump on 5nm considering yields, costs and how many extra chips per wafer they can get.
My point was that in general we won't see console makers abandoning 7nm anytime soon since it's their best chance to increase production now that the big high tech companies are jumping to newer processes.
Anyway you also need to consider that a 5nm chip results in lower power consumption so cheaper heatsink, cheaper power supply, cheaper components in general with a lower power rating.
So it could result in overall reduced manufacturing costs even if the APU alone is still expensive because the process is new.
I don't know where the breaking point is but I think that the PS5 Digital Edition might be the first model to get redesigned internals at 5nm while the bulk of production of the standard console will continue at 7nm at the current price until demand has been met and has started to slowdown. So basically not earlier than late 2023.
 
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HTK

Banned
There are 10's of millions of people happy to take your place and pay it. $2000 cards have been selling out in less than a second for nearly 2 calendar years. Those prices are actually too low for current market conditions.
That's fine, there will always be suckers.
 

Sophist

Member
TSMC capacity shares...

The big chunk: Apple
The second big chunk: nVidia
What left: AMD
What left from AMD: Sony
What left from AMD and Sony: Microsoft

For 3nm you probably should add intel and qualcomm above nvidia.

 

samoilaaa

Member
i dont know how exactly this stuff works but does this mean that there will be more chips left for consoles ?
 
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Maybe...

Sony and Microsoft will probably move to a lower process in their consoles... it is basically a sure thing.
A shrink in the APU is a key part the console business for price cuts.
Not a shrink to N5 though. Not yet anyway. N5 wafers are even. More expensive than N7 wafers and the potential savings from a shrink likely won't be worth it for Sony and Microsoft for at least another couple of years.

The move to denser nodes these days doesn't bring the types of cost savings it used to during the peak of Moore's law.

A Shrink to N6 is probably guaranteed at this point tho. You get a little bit more density, little bit of power savings, and its design compatible with N7.
 
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Sega Orphan

Banned
TSMC capacity shares...

The big chunk: Apple
The second big chunk: nVidia
What left: AMD
What left from AMD: Sony
What left from AMD and Sony: Microsoft
Priority comes down to money. Two companies want 250,000 wafers on the 7nm process. Company A offers 5,000 per wafer, company B offers 5,500 per wafer. Company B gets priority. Sony would have learnt by now not to try and get into a bidding war with MS. Money talks and bullshit walks. Not only is MS getting APUs made for XSX and XSS, but they are also getting a shit ton of them done for Xcloud server blades.
 

alstrike

Member
Priority comes down to money. Two companies want 250,000 wafers on the 7nm process. Company A offers 5,000 per wafer, company B offers 5,500 per wafer. Company B gets priority. Sony would have learnt by now not to try and get into a bidding war with MS. Money talks and bullshit walks. Not only is MS getting APUs made for XSX and XSS, but they are also getting a shit ton of them done for Xcloud server blades.

All this bidding war talk is fine and dandy until you realise that MS is not going to place orders of millions of SoC’s that they’re not going to sell.
 

ethomaz

Banned
Priority comes down to money. Two companies want 250,000 wafers on the 7nm process. Company A offers 5,000 per wafer, company B offers 5,500 per wafer. Company B gets priority. Sony would have learnt by now not to try and get into a bidding war with MS. Money talks and bullshit walks. Not only is MS getting APUs made for XSX and XSS, but they are also getting a shit ton of them done for Xcloud server blades.
Sony gets twice the wafer than MS from AMD/TSMC.
It just that Series S is very small so it production per wafer is way higher.

Even so Sony produce more PS5 than Series X + Series S combined.

PS. XCloud server blades come from Series X… it is the same chip… and the needs are very small in thousands while the production is in millions.
 
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Sega Orphan

Banned
Sony gets twice the wafer than MS from AMD/TSMC.
It just that Series S is very small so it production per wafer is way higher.

Even so Sony produce more PS5 than Series X + Series S combined.

PS. XCloud server blades come from Series X… it is the same chip… and the needs are very small in thousands while the production is in millions.
It's not about volume. Just because Sony might be getting more wafers does not mean they get first option and then whatever Sony doesn't need MS can then get. It doesn't work like that. Each contract TSMC has will have its own margins. If it is more profitable to make more wafers for MS, or any other company, they will do it.
For all you know TSMC might have more profit from a MS wafer than a Sony one. MSs wafers might have a higher priority with TSMC than Sony's. To just assume that MS gets the left overs that Sony doesn't want is so wrong it's not funny.
 

ethomaz

Banned
Do we have hard numbers on this?
That was the TSMC 7nm allocation shared in the past… I did not check if they share the same info for 2022 because it is too hard to search in Chinese.

Enz4JkHXEAI0OUK



78-80k wafer for PS5.
38-40k wafers for Series X|S.
 
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ethomaz

Banned
It's not about volume. Just because Sony might be getting more wafers does not mean they get first option and then whatever Sony doesn't need MS can then get. It doesn't work like that. Each contract TSMC has will have its own margins. If it is more profitable to make more wafers for MS, or any other company, they will do it.
For all you know TSMC might have more profit from a MS wafer than a Sony one. MSs wafers might have a higher priority with TSMC than Sony's. To just assume that MS gets the left overs that Sony doesn't want is so wrong it's not funny.
You really thinking too much if you believe both don’t want more wafers… no company wants that their product doesn’t have enough supply… it just the chip allocation is already set and at limit.

That is exactly why Sony and TSMC made a joint-venture to build a new manufacture factory in Kumamoto.

Now in the rumor side Sony is moving to 6nm to not fight for 7nm with all these others clients and have a better supply of chips.
 
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