I think whether they have a moat or not is debatable. There are only a small number of cpu or gpu companies since it takes time/money to develop a chip. However, other big tech companies beginning to make their own like Apple and Amazon, but this is because they have deep pockets. This isnt like Uber eat or Doordash where its quite easy to develop the product with a low amount of capital. So i would argue that the moat exists but isnt as deep as Google or MSFT etc.
Interest rate hike is causing a board market sell off on any industry that requires large upfront capital investment with pay off far into the future. Chip fab is probably one of the most expensive type of factory to setup with payoff far in the future. Discounted cash flow model and interest rate hike effectively overwhelmed the high demand effect from chip shortage.
Of the three companies listed there, only one (Intel) is a vertically integrated manufacturer that relies on their own chip fabs, the other two don't, they're fabless semi companies. So a lot of that argument is invalid, unless you mean to say that every company that relies on chip fabs is doomed (that would include pretty much all of big tech including Apple, MS, Google, Samsung and others).
Another thing is crypto crash cause a lot of gpu supply coming into second hand market. Dilute the forward demand.
Meh
it is all about where the innovation is happening. 20 years ago hw was far more valued than sw and was paid better 70 years ago sw was considered commodity and dijkstra had to justify why programming is a science not a mere hobby sw started taking a spot light last 10 years but i wont be surprised if the trend reverses. the market is dynamic. disclaimer: i am a sw guy
Agreed lol. Lately I just find SW so clichés! And maybe its time for tables to be turned.
It’s now obvious that all big techs are following Apple to transform into both SW and HW companies. People know the importance of developing their own chips. Salary-wise, people who know both HW and SW will benefit a lot from this transition. My PhD focus is in HW and SW co-design, or broadly speaking, HW acceleration that requires in-depth knowledge of algorithm, math, and architecture. I was surprised to be able to get close to 400 as a new grad few years ago. I can see that Silicon is finally back to the Silicon Valley.
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