Why Read: This week’s issue dives into the most important input to tech production behind the manufacturing of chips – and why the current market valuation of the best lithography is lower than it should be.
“It is much easier to organize control over one industry serving many markets than over one market served by the products of several industries.”
– Joan Robinson
What if I told you that everything you care about in the modern world depended on a single company?
It sounds crazy, but in the world of chips, it’s the absolute norm. The regular threats to attack Taiwan made by Chinese government representatives have stirred up a hornets’ nest of articles and online takes about the critical role of Taiwanese chip manufacturer Taiwan Semiconductor Manufacturing Co. (TSMC) to the global economy. We have covered the company and its coming expansion of production in the United States at length in the Global Report, and it is indeed a critical node, a single point of failure in the entire modern economy. TSMC controls 53% of the global foundry market.
And chips, these days, are everywhere. From cars to phones, computers to servers, sensors of all kinds – even your home speakers now require advanced semiconductors to operate. If you like movement, communication, having a job, or listening to music, it’s no longer an option: you need a chipmaker.
But who supplies those chipmakers? In an industry that increasingly relies on some of the most advanced technologies in the world to produce something now so commonplace it’s becoming nearly ubiquitous in the global economy, the supply chain for foundries is equally important. And as it turns out, there’s really only one show in town.
