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
TSMC is the largest semiconductor foundry the market share was 59%, the are followed by Samsung Foundry at 13% and UMC, GlobalFoundries , SMIC each at 6%. This is just foundries that make semiconductors for others, Intel that make many chips for themselves is not included.
Samsung production technology is quite close to TSMC. According to them “Samsung’s 4 nm technology is two years behind TSMC’s, and our 3 nm is about a year behind. But things will change when TSMC enters the 2 nm process,” So quite similar and the difference will become smaller over time.
The reason one or a few companies are dominant is because of the cost. The cost to develop a process at a smaller scale is billions of dollars. The cost to build a factory for it is billions. Whe a process changes to a smaller scale the upgrade cost is almost the same as a new factory, the buildings are not the most expensive part, it is the equipment in them.
TMSC built a new factory in Phoenix, Arizona The initial investment was $12 billion and when the factory grows the total investment will be around $40 billion. The construction of the first parts started in 2021 and production is expected at the end of 2024.
Because of the high development cost a single company that can build many factories has the advantage, It can spread out the development cost over all factories and chips made.
If you try to create a competitor you will first need to get people, the ones that know how to do it and already work at the other funders. You would also need to do a lot of research to get to the level they were when the new process development started, the you will need to repeat what they did. The complied that is first and developed new technology will get lots of patents and can stop you from doing some parts exactly like they do. This makes it harder if you are late.
Fo there is one part of the semiconductor manufacturing industry only one company can do that is ASML in the Netherlands. They mate the photolithography machins that is used to project the pattern onto the wafers other processes is to add and remove material. No other company can make machines that project them for the smaller processes.
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