đȘ TWiC: GF-SCALE, Apple-Intel, IREN, Optics, Cisco
This Week in Chips: Everyone eating everyone's lunch.
Tremendous amounts of earnings calls this week, and lots of companies trying to eat each others lunch in the news: GFâs SCALE trying to eat TSMC COUPE, and Intel stealing TSMC bacon in Apple business. Plus, optics is having a small moment.
Hereâs what you might have missed this week:
This article has been very popular because there are good reasons why nature pushes us up against a wall when it comes to power delivery. Give it a read; lots of tech content even before paywall.
Memory is just stupid expensive, but Deepseek V4âs SSD focus has implications for NAND. More on the Semi Doped Podcast.
Finally, if you want to keep up with daily news updates fresh and hot off the press, sign up for free to the Semi Doped Substack. Austin and I both post our takes there; easy and quick to read with your morning coffee. â
Now, on to the news.
GlobalFoundries SCALE vs TSMC COUPE
GlobalFoundriesâ SCALE (Silicon photonics Co-packaged Advanced Light Engine) is an optical module solution for co-packaged optics deployment in AI data centers, while being compatible with Optical Compute Interconnect Multi-Source Agreement (OCI MSA).
TSMC is the king of CPO today and COUPE goes to mass production this year with NVIDIA, Broadcom, and Ayer Labs as customers. But TSMC integrates the EIC and PIC on SoIC-X with hybrid bonding under one roof, and ties the whole stack into CoWoS. GF makes the PIC, but the EIC has to come from a different fab on a âsingle-digit advanced node,â which means TSMC or Samsung.
The new piece is the OCI MSA badge: Hyperscalers want optionality. The interesting angle is that OCI MSA changes the structural opportunity. If hyperscalers force multi-source qualification for scale-up CPO (the explicit goal of the MSA), GFâs TAM expands because customers are required to qualify a second supply chain. The bigger winner in this story isnât GF. Itâs the hyperscalers, who have the option to move scale-up optics from a proprietary fight to an open spec.
(via GlobalFoundries)
Apple, Intel Have Reached Preliminary Chip-Making Agreement
Very big news for Intel, and stock is up a lot INTC 0.00%â . While still not clear what product line from Apple will be manufactured at Intel, TSMCâs underinvestment in chip capacity is systematically giving away the keys to the kingdom to its competitors. For Intel, this is a much needed big customer for its Foundry services. This deal also brings back chip manufacturing back into American soil, possibly in a large way, depending on the order volumes Apple places with Intel. Intel has been killing it recently with CPUs, advanced packaging capacity via EMIB (another TSMC kingdom key), and now Apple business. Canât stop winning.
(via WSJ)
Nvidia Invests $2.1B in IREN for AI Infrastructure
Nvidia announced a strategic partnership with infrastructure provider IREN, investing up to $2.1 billion to accelerate large-scale deployment of AI data center infrastructure. The partnership targets building up to 5 gigawatts of AI infrastructure capacity, combining Nvidiaâs computing platforms and GPU accelerators with IRENâs infrastructure development, deployment and operational expertise.
This is now the standard NVIDIA neocloud financing playbook. NVIDIA stitches together a GPU buyerâs capital stack by:
Selling them GPUs (revenue)
Becoming an anchor tenant (revenue for the cloud, recycled back to NVIDIA)
Taking equity exposure to participate in upside
The capital stack of every major neocloud now includes NVIDIA either as direct equity, warrants, anchor customer, or all three. That concentrates systemic risk, but it also means NVIDIA can keep volume flowing even when traditional financing tightens.
(via Nvidia News)
Optics Industry Update
Biggest optics names reported this week: LITE 0.00%â COHR 0.00%â FN 0.00%â AAOI 0.00%â. All either beat or printed strong growth. All four sold off.
Main thing happening here: When everything is up 1,000%+ YoY, anything short of perfection becomes a sell signal. Hurlston during the LITE call: âWe are significantly undershipping demand. And weâre having to make choices as to who we support.â Usually thatâs bullish but now it tells investors you are capacity-bound, which means upside is now governed by how fast you can add capacity, not how fast demand is growing.
Also keep a close watch on microLEDs and VCSELs for short reach interconnects. More companies are optimizing microLEDs for datacenter applications, and not inheriting tech from display industry. Longer wavelength VCSELs at 980nm and 1060nm have distinct benefits at 200G/lane (needs a deep dive - interesting physics). ams OSRAM making moves into AI interconnects as well.
Optics is still important but a lot of the big names are priced in already. While they should still grow, just donât expect 1,000%+ returns again.
Evercore ISI: Cisco Silicon One is Underrated
Silicon One is Ciscoâs family of networking chips. It started in 2019 inside Ciscoâs own routers, and over time Cisco opened it up to sell directly to hyperscalers as merchant silicon. The latest parts are the G200, a 51.2T switch chip, and the P200, a deep-buffer router chip. Microsoft and Meta are the named hyperscaler wins. For most of its life, Silicon One has been a small line item buried inside Ciscoâs revenue base, and the buy-side has indexed Cisco as a slow-growth networking vendor rather than an AI silicon play.
This week, Evercore put a number on it. Silicon One could ramp from ~$3B in FY26 to $12-15B in three to four years, with roughly $7-8B in silicon and $5-7B in attached optics. The silicon number would put Cisco at roughly Marvell-scale and credibly third behind Broadcom in merchant networking ASICs.
Have a great weekend!
Added to my weekend reading list đ