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0 pointsfakethenews20223y ago0 comments

RR is not some contract designer. It is one of less than a handful of engine designer/manufacturers that could do it. This is more like asking some combination of Intel/AMD/Nvidia to design a custom chip and TSMC/Samsung to build it for you.

Sure RR would love to do preliminary investigation. But what is the opportunity cost for RR to design and manufacture these engines versus devoting those resources to engines for Boeing and Airbus? How many of each does it project it can sell? What harm would it do to RR if it were to fall behind P&W on jet engines for commercial jets?

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jjk1663y ago

> But what is the opportunity cost for RR to design and manufacture these engines versus devoting those resources to engines for Boeing and Airbus?

Less than what you offer to pay them to divert those resources, which is in turn less than what it would cost to acquire those resources by another means.

> This is more like asking some combination of Intel/AMD/Nvidia to design a custom chip and TSMC/Samsung to build it for you.

Exactly. You don't see Ford building their own fab to make the chips that go in their cars, they pay existing fabs like TSMC to make their chips.

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jjk1663y ago

> But what is the opportunity cost for RR to design and manufacture these engines versus devoting those resources to engines for Boeing and Airbus?

Less than what you offer to pay them to divert those resources, which is in turn less than what it would cost to acquire those resources by another means.

> This is more like asking some combination of Intel/AMD/Nvidia to design a custom chip and TSMC/Samsung to build it for you.

Exactly. You don't see Ford building their own fab to make the chips that go in their cars, they pay existing fabs like TSMC to make their chips.

j / k navigate · click thread line to collapse