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Taiwan Semiconductor And Intel: Together On '60 Minutes' But Far Apart On IC Business Strategy

May 04, 2021 6:50 PM ETIntel Corporation (INTC), TSM120 Comments


  • Intel's CEO and TSMC's chairman appeared separately on CBS 60 Minutes with vastly different timelines on the chip shortage.
  • Intel thinks the shortage will take years, while TSMC thinks it will end in eight months (end of 2021) to alleviate.
  • It may take a minimum of five years until Intel is able to be competitive in sub 7nm production to TSMC and Samsung.
  • Automobile IC manufacturers continue to make money on chips, as revenues grew 4.5% QoQ following a 5.3% YoY growth.
  • I present an argument that much of the shortage of ICs is due to stockpiling in China.
  • This idea was discussed in more depth with members of my private investing community, Semiconductor Deep Dive. Learn More »

3d microchip
Photo by Madmaxer/iStock via Getty Images

On a May 2, 2021, CBS 60 Minutes Show, we had the opportunity to listen separately to Intel's (NASDAQ:INTC) new CEO Pat Gelsinger and TSMC (NYSE:TSM) chairman Mark Liu.

The airing provided viewers a

This free article presents my analysis of this semiconductor sector. A more detailed analysis is available on my Marketplace newsletter site Semiconductor Deep Dive. You can learn more about it here and start a risk-free 2-week trial now.

The Marketplace article of the same title includes 5 tables and 2 charts instead of 2 tables and 1 chart in this free article

This article was written by

Robert Castellano profile picture

Robert Castellano has 38 years of experience analyzing the semiconductor markets.

He runs the investing group Semiconductor Deep Dive. It provides investors with recommendations for stocks with the greatest near- and medium-term growth potential. Members receive detailed analysis and research tools to make investments in semiconductor and tech stocks. Learn more.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (120)

The difference is that Taiwan is committed to the chip industry and the economy is absolutely booming and it was expanding even last year (while the USA slumped) The economy is expected to grow 8% this year and is doing so well such that many from the USA here in California are moving to Taiwan which has a better healthcare system than the USA. TSM can easily get more talent while INTEL has a bad reputation with engineers as being a loser corporation. My last boss was an ex-INTEL employee and he only had bad things to say about the company.
jef.holtmyer profile picture
I am betting that Intel in California has more than the needed health care for their employees. It is far more likely that the individual tax liability has been far more of an issue.
TSM long, I own INTC too but the USA does not promote higher engineering education. I was a PHD engineering student at the Univ. of Michigan and almost everyone including my professor advisor ( who was a world expert) was Asian. That is why TSM, a free China company, will rule. Lisa Su, who made AMD what it is is from China. I also own, ADI, MCHP, IBM, NXP, TXN UMC I but very long TSM with a 900% gain.
@omega2345 wrong, Lisa Su is a born and raised Taiwan native. Taiwanese people resent being called Chinese.
( www.cnbc.com/... ) Is the "Panda" swipes at a globally perceived sovereign nation going to influence $TSM to increase overseas expansion-N-business development? Remember Hansel and Grettle and those bread crumbs. Long $INTC, $SBUX, $BRK.B, it's good to have insurance.
@Hugh Arhue I can't think of one reason for China to invade a country to forcefully gain a company. Can you?
@CL73 No. they are not stupid. they have never done so in history. Looking back on their nuclear bomb project, BeiDou Navigation Satellite System (GPS equivalent or better), Space station project..., you will find that they have eventually built their own system by themselves. Not to mention that TSMC is only one part of the semiconductor ecosystem, relying on ASML for EUV machine and some Japanese companies for some chemicals, getting TSMC does not solve their problem. They are going to be eventually fully independent if we keep pushing them to the corner. In the future, there will probably be two incompatible systems in each important technology fields in the world. in my opinion, the red line for the war is the independence declaration, never a company.
C185 profile picture
@CL73 China's desire to re-absorb it's break-away province long pre-dates TSMC. If you must absurdly trivialize an issue you've admitted you've lost the argument.

Taiwan itself is beginning to realize it's been too complacent in enabling China's ambitions.


[TAIPEI -- Taiwan has told staffing companies to remove all listings for jobs in China, a drastic move to prevent the outflow of vital tech talent to the mainland amid rising tensions between Taipei and Beijing.

The Labor Ministry said that all Taiwanese and foreign staffing companies on the island as a general rule may no longer post openings for jobs located in China, especially those involving critical industries such as integrated circuits and semiconductors, according to a notice seen by Nikkei Asia.]
Mike Bruzzone profile picture
For the reality on Intel nation's state subsidies, must have been someone setting up Gelsinger for a fall because he would never ask for that;


The same Intel infiltrators that took out BK?

Mike Bruzzone, Camp Marketing
Mike Bruzzone profile picture
So Ford's going to take Intel back?

Mike Bruzzone profile picture
60 Minutes needs to expand its coverage on domestic chip fabrication situation incorporating on best practice of investigative journalism point counter point now that Intel had its say.

Somehow Mr. Gelsinger forgot about Intel's role concentrating industry under monopolistic restraints and 60 Minutes as a beneficiary of Intel Inside ad spend forgot to ask those questions.

Mike Bruzzone, Camp Marketing
Mike Bruzzone profile picture
60 Minutes producers know Intel is the cause of the United States domestic fabrication concentration and totally avoided addressing that reality.

Mike Bruzzone profile picture
Its worth the District Court filing fee to get the attention of 60 minutes to address what 60 minutes has known about for 2 decades including on PR maven gate keepers blocking on that subject matter while 60 minutes ran in opposite direction.

Its a very sad day for journalism in the United States.

You lost me with this: "With a fab taking two or more years and then another three years to go from R&D to high volume production (See Chart 2 of my Intel article referenced above), it may be a minimum of five years until Intel becomes competitive with TSMC." Not true. Intel doesn't build a fab and then do R&D in that fab. R&D is done in Hillsboro, OR, and the process is transferred to other existing factories around the world. Manufacturing and R&D are done in parallel, not serially.
Robert Castellano profile picture
@johnnyo333 Yes I'm taking that into consideration. D in R&D is not HVM, and if you go to Table 2 the R&D to HVM is 5 years for Intel. I knocked off 2 years for the Hillsboro work.
@Robert Castellano You are aware that Intel 7nm is already under way in their existing fabs and they don't have to wait for the 2 new fabs in Arizona to start 7nm. And Intel's 7nm will be significantly ahead of TSMC 5nm.


The 2 new fabs are to cater to more scale but they don't affect the cadence of progression at Intel. That is dependant on their execution which has been less than ideal in the past few years.
Robert Castellano profile picture
@Mojo_hk The article you give a reference to is about IBM, and the single chart shows intel's large transistor density on 7nm using DUV. Hence they moved to TMC for 7nm. Intel's Fab 42 is a 10nm fab, as noted in this article referenced: "The company’s 10nm Fab 42 also came online last October, boosting production of Intel’s most advanced chips."
TreDrier profile picture
Ok so here's where I am trying to understand the problem when it comes to semiconductor companies and the stock market: why is the semiconductor industry as a whole getting sacked in the stock market when demand exceeds supply? Thus they can charge more for the same product. This should be greeted with huge gains in the market but its worked exactly the opposite this year versus killing it last year. These stocks should continue to climb thus this looks to be a great buying opportunity. Correct?
@TreDrier I share your thoughts. I've been staring at TSM for sometime. I think i'm ready to buy some shares in the sub $120 range. It seems to have stabilized. My feeling is that the sector did a bit of a correction and a new bull run is close.
Downward pressure on chip stocks may be partly due to two factors.
1. Planned heavy spending for new fabs, which will mean less money for other areas, especially dividends and buybacks. May also be increases in costs due to raw materials, labor and other inputs used for chips.
2. Many analysts expect 2022 to be a down year for chip makers. Have heard that notebook sales have unexpectedly dropped sharply. Wondering if demand has fallen off the cliff elsewhere. Part of the pandemic sales of laptops and desktops may have been pulled forward from what (I hope) is now the post-pandemic era. (Folks in India would likely disagree, since India's folks are dying at a higher rate than a year ago.) Some stockpiling may be unwinding now or shortly, depending on the nation and type of chip.
TreDrier profile picture
@bill.reist Regarding #1, I agree with your premise BUT with the shortage and lack of intense competition (ie Intel has fallen off a cliff) they should be able to pass on the higher material costs. Idk something here isn't right and I have a feeling it has to do with China. I believe they are building new fabs to compete which is why they are hording semi's.
If you are in anyway related to the semi/chip supply chain then there is only one strategy. Produce everything you possibly can.

More and more things have like twice the demand of supply these days.
@Robert Castellano - you mentioned "That may be well and good because Intel has a lot of fabs making chips at the >28nm node using fully depreciated equipment."
I am not sure where you are getting this from. I believe the only Fab that is making anything >28nm is in China, and it is making memory chips.
Could you clarify - Which are the other Intel Fabs doing these old generation chips that you are referring to?
Robert Castellano profile picture
@josej The 28nm ws aa figure of speech. What I am implying is that Intel is making new fabs and those are in the 7nm and below nodes and as a foundry are intended to compete with TSMC and Samsung. I'm suggesting they use these new fabs to make CPUs to compete against AMD, and use older fabs to enter the foundry market and then compete against UMC and VIS and others. Their newest Fab 42 is set at 10nm.
@Robert Castellano OK, thanks. I live in Gilbert (Chandler/Gilbert is in the East Valley in Phoenix Metro area). You can hear a lot about them at Pei Wei during lunch, or at your kids' school events or even the church :) F42 is not likely 'set' at 10nm and is part of the larger 'mega factory' running many products/generations (see the picture at the Flickr link - the two big 'tunnels' above ground connect all the 4 buildings. This 'tunnel' stuff was big news and a huge construction effort that lasted almost 3 years and just finished - Video on Twitter).



Also, there is no way in my mind for a US semiconductor factory to make money by producing low-margin chips in competition with UMC or SMIC, or any number of others, who have Fabs in Asia. I don't think this is, at all, where Intel is going to spend their floor space on, even in the Foundry business.

My point is, it is hard to make a lot of predictions on what these companies do and can do, at the level you are attempting, and you are stating these as facts rather than assumptions. I think it was the same reason I commented on another one of your articles.

But I agree/understand, that is what an analyst does - predict what these companies do.
jef.holtmyer profile picture
The money in FABs is at the bleeding edge. Right now that is TSMC only. Four years ago it was Intel. In seven years, when all of these new plants are at full production, it is hard to effectively guess who will be at the top. I am betting against Intel at this point. That is because TSMC has Apple pumping billions of dollars into them each year specially to get the best available chips. Intel did not do this when they had the top spot because they where not make the millions of chips that Apple and Samsung needed. This was so they could maintain the competitive edge. We now know this was a mistake. Intel has made at least two of those mistakes with Apple alone. Who knows who else the messed up with in the past.
To state the obvious, Intel has a long way to go to catch-up to TSMC's process robustness. It's one thing to successfully make prototypes on bleeding edge process technologies; but quite another to achieve the robustness required to do it consistently enough to satisfy the diverse needs of foundry customers and be profitable.
And to state, what may not be so obvious, where TSMC really excelled in my opinion is when they developed best-in-class customer service systems to provide all of the ancillary things that fabless customers require to be successful. This is as challenging, and possibly more so than the technology development, even when you have the DNA to understand and fulfill your customer's needs which often are not aligned with your own. Although they got some experience with this with Apple who can be extremely challenging; Apple has the resources and leverage to make sure that you are fully servicing them. So the bigger issue for Intel's transition will to be providing the level of service to make their customers successful when they are not able to put the same attention that Apple does. In this respect, if I were to use one word to describe Intel's DNA, it would be arrogance. I expect that Intel will eventually get there because they are betting the company on this and will have to do it to survive; but they will have a lot to overcome and this will likely be a very rocky road.
Niksurfs profile picture
TSMC a superior holding over INTC. No question... and TSMC is right this will be over or caught up long before INTC thinks it will be.
Rob, what u think of the sell off yesterday?
johnboy1865 profile picture
Two answers to two different questions. Gelsinger's answer was to more than auto chips. Liu's was to auto chips specifically.
Robert Castellano profile picture
@johnboy1865 So your saying TSMC will fix the automotive shortage, then after that's done, semi company x will fix the gaming chip shortage, then after that's done, semi company y will fix the smartphone chip shortage, then after that's done semi company will fix the consumer chip shortage.
johnboy1865 profile picture
@Robert Castellano Your reply appears to be you speculating about what I am saying.
In actuality, what I am saying is that the CEOs were asked different questions, thus casting their responses as answers to the same question (comparing their answers to see who said/didn't say whatever) is problematic.
C185 profile picture
@Robert Castellano the premise of your article is Gelsinger and Liu were answering the same question, which they clearly weren't. Liu's 2 and 8 month answers were specifically about the auto segment shortage. Gelsinger was answering a "for everything" question.

Looking at their announced investments they're clearly aligned. TSMC is not committing $100B over three years to solve an auto segment shortage that Liu says will be resolved on their end in 2 months.
Xxfactor profile picture
Semiconductors are getting hammered lately. The etf that shirts the sector is killing it every day. Maybe it will turn around soon. Intel is trying to do everything
Respect the Game profile picture
Thx Robert for another informative article.

In the past INTL had two massive advantages, x86 and manufacturing dominance, everything is different now.

INTC has a long way to fall.


Bought more TSM yesterday
Xxfactor profile picture
@Respect the game is that on a good dip?
Respect the Game profile picture
@Xxfactor from 141 i would say it is good enough, was waiting for 100 on the last dip but it never made it, FOMO came in to play.

@Respect the game As always, there is public relations. ( www.bloomberg.com/... ) $TSM probably cannot build that new facility in AZ fast enough.
Sighcopath profile picture
TSMC Chairman Dr. Mark Liu since 2018. He was the president and Co-Chief Executive Officer from 11/13 to 06/18. So who are you going to believe? Someone who rejoined INTC in February 2021 (less than 3 months) or someone who has been the leader or shared the leadership of TSMC for over 7 years and been continually employed by TSMC for over 20 years.


Nothing against the new CEO at INTC but if the problems are so simple that he can get a complete grasp on them in under 3 months then I doubt that INTC (as large as INTC is with its multiple segments and integrated business model) had any real issues prior to his rehiring!
SuperPac profile picture
Intel, the iconic company of days of yore going to governments with a begging bowl, is perhaps deeply symbolic of the Power-shift. It's a sad spectacle.

This hollowing out of American manufacturing has been overseen and guided by the American political and financial elite, with bipartisan support from the days of Nixon (Republican) and Carter (Democrat). It gathered momentum under Bush / Clinton and now there is nothing stopping it.

CNBC headline 15 hours ago:

''U.S. trade deficit surges to record; shortfall with China keeps rising''

Sighcopath profile picture
@SuperPac Actually the globalist movement want America to become the mecca of the rich and powerful while the rest of the world become the pollution producers. if your rich and powerful then the Globalists are great. if you poor the globalist agenda is the new form of serfdom!
Xxfactor profile picture
@SuperPac The main driver of overseas manufacturing is Americans refusing to pat a premium and workers insisting on minimum wage.
@SuperPac you do realize Tiawan subsides TSMC.
Mike Bruzzone profile picture
grxbstrd profile picture
I agree Intel is going for the money grab. The idea they are so far behind ought to be concerning they are the lead horse for domestic mfg.
@grxbstrd only horse in us mfg
@grxbstrd like the idea that Nvidia bs so far behind ( as in non existent) in the CPU race the made a failed bid for ARM that's never going to grab anymore than 5% share in the DC anyway.

Got it 🤣
grxbstrd profile picture
@zisdead Don't you ever feel shame claiming I said something so you can make up some BS point to serve your agenda?
Intel also announced that they'd be making their x86 technology available. It seems their intention is to make all their technology available as building blocks, as presented in their Client 2.0 presentation last year. They would also be making their advanced assembly available ... foveros, emib. It looks like a good alternative to losing big customers to ARM designs.
@jayn INTC x86 technology have always been available to clients (in the form of cpus). What are you implying, that x86 ip can be licensed out?
@CL73 look up full custom.

That's what Intel is offering.
Night and day in the difference than selling a customer a core

It's a game changer if you are one of the hyper scalers
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