Chapter 111: Potential Massive Profits

"Here’s how we play this," he began. "We’ll divide the first year of production into segmented allocations. NVIDIA takes forty percent of the wafers for GPU and accelerator production, twenty percent goes to strategic partnerships, companies like Meta, Google, and OpenAI, and the remaining forty percent is sold through long-term contracts. That last group will be our biggest cash generator."Timothy listened quietly, nodding slightly. "And the pricing model?"

"Tiered," Jensen said immediately. "We start with a premium access fee, about thirty percent above market, for companies who want priority fabrication. Then we tie it with an exclusivity clause. OpenAI’s already showing interest in exclusivity for their AI compute chips. They’ll pay double the base rate to guarantee throughput priority. Once they’re locked in, the others will follow, none of them can afford to lag behind in this race."

Timothy’s eyes narrowed slightly. "That’s one way to corner the demand, but that exclusivity clause is dangerous. You give OpenAI that deal, Meta and Google will retaliate, not openly, but economically. They’ll shift contracts, freeze partnerships, or fund a rival fab just to undermine our leverage. We can’t be seen favoring one player in a market this volatile."

Jensen tilted his head. "You’re suggesting we turn them against each other instead?"

"Exactly. We give each of them something to chase. Limited allocations, staggered release timelines, variable wafer performance thresholds. Make every shipment cycle a competition. That way, they’ll all fight for higher priority, and we’ll profit from their race instead of being tied to one of them."

Jensen raised an eyebrow, impressed. "A controlled supply war."

Timothy smirked. "Think of it as managing greed. They’re already desperate — we just make sure their desperation pays for our next expansion."

Jensen nodded slowly. "That would push the price index far above the baseline. If each of them competes for capacity, wafer values could inflate by fifty, maybe sixty percent."

"Eighty," Timothy corrected. "If we play the logistics card right."

Jensen chuckled, shaking his head. "You’re ruthless."

"I’m practical," Timothy replied. "We’re standing on a gold mine, but gold only matters when the world realizes it’s rare. If we flood the market or let one company dominate the supply chain, we lose leverage. Instead, we keep them hungry. That’s how NVIDIA became untouchable, didn’t it?"

Jensen laughed softly. "You’ve been studying me too well."

"Of course, you have to learn from someone who has built a trillion dollar empire. I am also focused on getting myself in the same field as you."

"Well with the current business you have, you’ll get there soon enough," Jensen chuckled and added. "Oh, Apple also wants a piece on the semiconductor chips that we are making so expect in the next coming months, you’ll be flying out a lot securing deals with those companies alongside me."

"I have no problem flying out of the country, I have my private jet after all," Timothy said with a light smirk, leaning back into his chair. "But before I start jumping across continents, I want to understand one thing clearly. these hundreds of billions you mentioned. I want details, Jensen. How much are we talking about exactly? Per company. Per cycle. I need real numbers."

Jensen grinned slightly. "I thought you’d ask that. Let’s start with NVIDIA’s allocation. Forty percent of total wafer output — roughly 600,000 wafers per year once full capacity is achieved. Each wafer will average about $18,000 for the advanced 3-nanometer process nodes, but since we’re bundling proprietary optimization for AI accelerators, the market rate pushes to $26,000 per wafer. That’s roughly $15.6 billion in yearly sales just from NVIDIA’s side, and that’s before margin markups and shared R&D cost offsets."

Timothy nodded slowly, eyes fixed on the numbers. "So fifteen billion just from NVIDIA. That’s not bad."

"Oh, that’s just the baseline," Jensen said with a grin. "Next, strategic partnerships — Meta, Google, OpenAI, Amazon, and Apple. Combined, they’re expected to take around 300,000 wafers annually. But here’s where things get interesting — these guys are fighting for compute dominance. They’ll pay higher for throughput guarantees and delivery priority. We’re pricing those allocations at $32,000 per wafer, with a ten-percent logistics and packaging surcharge. That’s $10 billion per partner on average, or roughly $50 billion total every cycle."

Timothy raised an eyebrow. "And by cycle you mean annually?"

"Quarterly," Jensen replied smoothly. "They’ll burn through those wafers in under four months for data center refreshes. Multiply that by four cycles a year, and that’s around $200 billion in yearly revenue potential from AI customers alone." ᴛhis chapter is ᴜpdated by novel·fiɾe·net

Timothy blinked once, his expression unreadable. "So we’re looking at,"

"$215 billion annually, minimum," Jensen said, finishing his sentence. "And that’s conservative. If Apple joins in on the second cycle and demands allocation for their new chip architecture, that figure climbs to nearly $260 billion. Add government defense contracts or specialized manufacturing for national data centers, and we could breach $300 billion by next fiscal year."

Timothy tapped his fingers thoughtfully on the table. "And our profit margins?"

Jensen swiped the display again, revealing another sheet. "Manufacturing costs per wafer, including materials, maintenance, and cleanroom operation — hover around $9,000 per wafer. Add another thousand for logistics and packaging, and you’re looking at $10,000 total per unit. With our current pricing, the average net profit margin sits around 58 to 62 percent."

Timothy did the math in his head, then exhaled slowly. "So roughly $150 to $170 billion in profit per year."

"Exactly," Jensen confirmed. "And that’s with just the current fab. Once we expand to three Fabs, we can double that capacity within three years. But of course, you’ll have to solve the power issue because I heard Philippine electricity is expensive."

"Don’t worry about it, we are working for the solution," Timothy said. "One of which is radical at best to the point I might get criticized for it."

"Well, you better do a good job at it. I’m letting you build those fabs in your country because it’s your technology. Because in the future, you won’t be building it in your country, you will be building it in mine. Our president wants manufacturing to be back in America."

"I heard about it," Timothy said.

"You are also planning on expanding your automotive industry? You were planning on building gigafactories in Thailand, Vietnam, and Indonesia?"

"The global demand is rising and the gigafactory in Subic won’t cut it. That’s why we are set on building gigafactories in other countries, not just in Southeast Asia but also in Europe and the United States. I’m sure the US president would be pleased to hear that from me."

"He would," Jensen chuckled.