Semiconductors have been a major topic of conversation this year, as shortages of these crucial components have affected every industry across every country. That is how important they are. Yet, surprisingly for such a critical component, the number of companies able to manufacture them has fallen. In 2001, 20 companies could make the most advanced chips at that time. Today, as technology has improved and many of these 20 didn’t invest to keep up, only two companies can produce the most advanced chips today – Samsung and TSMC.
America once was a leader in semiconductor design and manufacture. Companies like IBM and Intel were at the cutting edge. But these companies let their lead slip, to the point where America’s technology giants and the US military had to go overseas for their semiconductors. IBM sold their chip business in 2014, ultimately paying GlobalFoundaries $1.5 billion to take it off their hands. Intel has seen numerous delays over the past 5 years and watched as Samsung and TSMC pull ahead.
Now Intel is following TSMC’s lead and pushing hard into the ‘foundry’ model with a $20 billion investment in two new facilities in Arizona. This isn’t the first time Intel are attempting to launch a foundry (their previous attempt was shuttered after five years in 2018). However, the demand for semiconductors has never been higher and the concern in US policy-making circles around supply chain security for semiconductors makes this an opportune time for Intel to renew this bet. Gone are the days when IBM and Intel designed and made their own chips. Now, Intel’s betting their future on making everyone else’s.
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