David Rosenthal: belief

Transcript context

…It is crazy that if you just look at every year, the CapEx versus the net income of this company, they basically spend all the money, not all the money, but their CapEx grows in a very similar way if you look at the bar graph to their net income from the year. That is even before R&D, David, to your point. If they were looking around at competitors at other foundries and saying okay, how much can we invest? They can invest more than anyone else because they have the most volume. Then on top of that, they are also spending on a separate bucket of R&D on the technology for their manufacturing processes. That’s how you get CoWoS, which is the technology that they use for packaging for AI chips. That’s their proprietary thing, which by the way once you have proprietary packaging, then it’s even harder for customers to go and double source, double manufacturer elsewhere. They have a similar technology for packaging of mobile chips that doesn’t use CoWoS. It seems like this is a market where those in the lead are only going to get further in the lead over time, absent some big strategic mishaps or some big execution mistakes. Totally. Then I think the last playbook theme here for me and for us is just that Moore's Law is undefeated. At the end of the day, back from starting all the way back Morris’ career at TI, and being a contemporary of Jack Kilby and Bob Noyce and the invention of the integrated circuit, once the integrated circuit was invented, the compounding growth of that industry is all that mattered. Everything else is just downstream of the fact that the world is going to demand more computing at this monotonic, exponentially increasing pace every 18–24 months. Of course, the technical definition of Moore's Law expired a long time ago, but spiritually, the world demands roughly 2x the computing power that it had two years ago, every two years. That has continued for 50–60 years at this point and shows no signs of slowing down, and as a result… Well, no signs of slowing down except that they keep hitting theoretical physics limits.…

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