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It's certainly possible that TSMC or Samsung will just go right to a 10nm-ish fab. But, again as I understand the situation, foundry margins aren't good enough for them to be on the bleeding edge of chip manufacturing

OK. So I understand you correctly, what you are saying is foundry margins are poor hence TSMC and Samsung (?!) cannot afford it. However INTC can because they make high margin on x86, that should allow them to buid these 10's of Billion Fab's.

Just wondering, if INTC becomes foundry for AAPL and others, what it will do to its margin? and how will market handle the margin erosion? What kind of valuation adjustments investors has to make?

While the scenario you pained is interesting, it is not an easy choice to get into foundry business big time.
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