First, I said nothing about TSMC leaving their existing business to enter the consumer business. No need inventing stuff to make a point sound better.
I said nothing about leaving their existing business. I said leaving their focus on semiconductor manufacturing; as in, trying to do unrelated stuff on the side such as consumer electronic devices. "No need inventing stuff to make a point sound better."
If I'm TSMC, I keep doing the profitable business I'm doing and am always looking for my own next big thing. Where can I grow beyond what I'm doing now? (NOT how can I get rid of my current business and become something else)
If I can see myself as a modest equivalent of Samsung's "parts" business, then Samsung may be a good proxy of a big competitor in terms of how I might expand my business. Maybe TSMC dreams of becoming the next Samsung by looking at what they have that is similar to what Samsung has and where else Samsung is that they are not? Competitive analysis to drive business growth is a fundamental of strategic planning. What "we" are doing that is like Samsung is working well; what else is Samsung doing that we could do?
Except TSMC isn't "a modest equivalent of Samsung's "parts" business".
Samsung's semiconductor business has two different parts.
One is the manufacturing. That's TSMC's game, where with the exception of Intel, they're top of the world.
The other is chip design, which is what all of TSMC's clients (and Samsung's competititors) do.
Second, if it is indeed "A field which is also extremely hard to enter successfully. A field which is also extremely expensive and risky to expand in" they should be able to have some security in their deals with partners like Apple so that they could take some risk in growing beyond what they do now. If it is as hard and expensive to enter successfully as you imply, where's Apple going to go (back to Samsung)?
TSMC's already got security. They control their expansion of fabs, which are of higher demand than clients. They turned down exclusivity deals on existing fabs with Qualcomm and Apple already, if you haven't read. If Apple or Qualcomm want guaranteed production capacity, Apple and/or Qualcomm will have to either take the existing deal like everybody else, or help fund the costs of a new factory, therefore taking on the expansion risks.
Third: "If their business leaders were dumb enough to defocus," Would "dumb" apply to Apple before Apple launched iPod? How about iPhone? In both of those, Apple had to "defocus" to try some new strategic thrusts. But let me guess, that was "different" because it was closer to their core business than TSMC and other partners defocusing from say- making the crucial guts of technology to putting those guts in a metal case with a glass front and using a free OS... just like Samsung. You know the case and the glass is not the hard or complicated parts to source and/or make.
I was one of the first people who as soon as the iPod launched, thought they were nuts.
But given that they were in a shaky market position, and had to change, it turned out to be worth it.
But yes, going from exclusively semicon manufacturing to consumer electronics is significantly farther in core competencies than from large computer to small computer, especially given that the iPod wasn't even close to being Apple's first portable electronics device.
I'd assume you have no electrical engineering experience, or else you'd know this.
Furthermore, cases and glass are deceptively difficult.
Prior to the iPhone, there was no source for Gorilla Glass, and no mass manufacturing method for cutting/shaping it.
You should read up on why the unibody macs were significant. And how Gorilla Glass works.
Intel is apparently defocusing in trying to enter the consumer TV hub business soon. But that can't possibly happen because a chip maker would never try to break into some new business opportunities in the consumer products space. Let me guess: that's different too.
Intel is a different story.
Intel faces several problems:
1) Shift to ARM slowly kills their cash cow. Both in terms of developer expertise and demand. Intel knows this because it's been their tactic for the last several decades. Now they're on the receiving end of it.
2) Semicon process manufacturing r/d is slowing down because it's simply harder. So they know it'll be hard to maintain their gap over other foundries. If they were simply a foundry, not a big deal. The problem here is that that's how they've maintained an advantage over AMD, and that advantage is extremely important for getting Atom to be somewhat competitive to ARM in terms of power efficiency.
Intel isn't actually trying to enter the consumer TV service business. They're trying to develop a base platform they can sell to tv service companies in order to ensure people still keep buying Intel chips. Just like their smartphone initiatives.
With that said, Intel's also known for making some pretty dumb marketing-driven-engineering decisions.
When will TSMC face this sort of problem you might ask?
1) If other foundries catch up in production capacity, it'll be harder to maintain clients.
2) If a breakthrough new integrated electronics manufacturing technique is pioneered, which is cheaper than silicon and more performant.
If these happen, then it's time to diversify.
Google was just search. It would make no sense for a search-focused company to get into the mobile phone OS space... especially if they were going to give away that OS for free, right? How about cars that drive themselves? Solar panels? Cable TV subscriptions via fiber?
Google's product is eyeballs. Everything else is an overall money sink.
Kodak stuck with what they considered their core- the film business. And where did that relentless focus get them?
Like I said above, if a breakthrough new integrated electronics manufacturing technique is pioneered. And TSMC ignores it. Then it's a Kodak (business) moment.
Nevertheless, I give here (for now). Clearly, we wish to celebrate Apple sticking it to Samsung for "ripping off" Apple's ideas and becoming a copycat competitor while at the same time finding it practically offensive/impossible/etc that any other Asian company partner might try to do the same. Samsung has done very well with that "strategy" and it makes perfect sense (apparently only to me) that other companies might look at Samsung's success doing exactly that and think about whether they could take a shot at doing something similar too.
Believe what you wish and we can let the passage of time (and the desire for business growth at companies other than just Apple) prove this out... or not.
And I counter with: LG has not done very well with that "strategy". So you can't expect that to be a certainly reasonable direction for any company to go.