My understanding is that 1 company in Taiwan makes the greatest chips in the world and no one else can replicate them. How is that possible?
In: Engineering
Semi conductors manufacturing is the most difficult mass production on the planet.
It requires tremendous amounts of investment to build and operate a fab. Each successive semi-conductor generation (often called a “node”) is getting more difficult and expensive to design and produce, with the possibility of it being delayed / faulty increasing (this happened with Intel’s 10nm process). As a result, a lot of companies dropped out, and at the bleeding edge we’re left with 3 main players: Intel, Samsung, and TSMC.
Currently, TSMC has the best process – right now it’s being used for the new iPhone Pro and Apple M3 series and should expand to more products from AMD and and Nvidia by the end of the year.
There’s also one main company left producing the machinery to make these highly advanced nodes economical: ASML. These machines are very complex, expensive, and limited in quantity per year.
TSMCs leadership role isn’t a guarantee. Intel and Samsung aren’t THAT far behind, and Intel in the last few years has dumped tremendous amounts of money into R&D (more than AMD, Nvidia, and TSMC combined) in an effort to close that gap. Intel claims they will take leadership from TSMC within the next 18 months of so (but this is certainly not a guarantee and remains to be seen).
Another aspect is that Intel is only now just beginning to open their fabs to external design companies. For a long time, companies like AMD, Qualcomm, Nvidia, etc. Went with TSMC because they were the best available for them. A few years ago, Global Foundries was close enough to be considered, but they’ve since dropped out of the leading node market, and last gen Nvidia sourced from Samsung because their 8nm node was “good enough” and cheaper than TSMC’s 7nm node and Nvidia was able to compete due to their extremely good architecture design that offset some of this discrepancy.
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