THE CHIP MARKET

ASML holds a dominant position in the chip market due to its EUV lithography machines, which are essential for cutting-edge processor chips. These machines, priced at a staggering $200 million each, play a crucial role in fueling the operation of modern digital devices. ASML's rapid growth and pivotal role in chip production are highlighted in the video, which demonstrates how precision lasers and molten tin enable the company to make EUV technology a reality. In recent years, ASML has achieved remarkable success, surpassing even Intel in value, one of its major chip-making clients. On the other hand, TSMC leads the way in chip technology, benefiting companies like AMD and Nvidia. By staying ahead of Samsung and Intel, TSMC provides its customers with a competitive edge. Intel, on the other hand, lags behind TSMC in chip manufacturing and is striving to catch up by investing in ASML's latest machine. ASML is at the forefront of extreme ultraviolet lithography technology, operating in a vacuum environment.

While DUV technology (193 nanometers) remains widely used, ASML utilizes extreme ultraviolet light with a wavelength of 13.5 nanometers for lithography. EUV technology necessitates precision at the atomic level and involves a continuous flow of tin, laser vaporization, and the emission of photons. ASML is currently encountering difficulties due to the global chip shortage. The company's suppliers are experiencing delays in delivering components because of chip scarcity, which is affecting ASML's production capacity. ASML is making preparations to scale up production to meet the rising demand and tackle the ongoing chip shortage. ASML is forecasting a 20% increase in sales and an annual revenue growth rate of 11% until the end of the decade. TSMC and Samsung, ASML's primary clients, produce the most advanced semiconductors in Asia. There are worldwide efforts to address the chip shortage, including the U.S. Chips Act and China's Chips Act, which aim to transform chips into a strategic resource. TSMC holds a dominant position in the chip market with its cutting-edge production capabilities and global influence.

The global chip supply chain heavily depends on TSMC, which manufactures 24% of all chips and more than 90% of advanced ones. TSMC is investing $100 billion to expand production and bring chip manufacturing back to the United States. TSMC is relocating advanced chip manufacturing operations to U.S. territory, focusing on pure-play foundry services and manufacturing excellence. Intel is facing challenges in constructing fabs, while TSMC is excelling in chip technology and market dominance. Intel depends on TSMC for Mac chips, with TSMC focusing on IP protection, innovation, and leading in nanometer chip production. ASML, TSMC, and Intel are key players in the chip market, powering devices like smartphones, household electronics, and cars. TSMC is establishing a state-of-the-art fab in Arizona, while Intel is heavily investing in new fabs. TSMC's move to the U.S. aims for diversification and closer proximity to customers, tapping into a larger pool of analog designers and bringing advanced manufacturing to the U.S.

The U.S. government is investing in domestic chip manufacturing to enhance global competitiveness, including efforts to attract TSMC for advanced silicon production. The Biden administration's proposal of $52 billion in subsidies for chip companies like TSMC to manufacture in the U.S. highlights the importance of staying competitive in chip technology advancement. Intel, once a leader, is now lagging behind TSMC and Samsung. Intel's new CEO has an ambitious strategy to close the gap and tackle the global chip shortage. Intel is ramping up production in the United States to achieve self-sufficiency. Intel is aiming to produce chips for Amazon, Qualcomm, and other companies in Arizona. Intel's bold initiatives are geared toward reclaiming the top spot by 2025.

The outsourcing of chip manufacturing to firms like TSMC has transformed the industry. Companies such as Apple and Nvidia have chosen to outsource chip production to specialized companies like TSMC, resulting in enhanced efficiency and expertise. TSMC's achievements have enabled it to outpace Intel in manufacturing technology, while Intel remains an integrated device manufacturer. The chip shortage has made chip production more appealing. Gelsinger's move to intensify manufacturing in response to the chip shortage and rising chip prices at TSMC. Intel is aiming to outperform TSMC and Samsung in chip production capabilities by 2025 through an aggressive IDM 2.0 roadmap. TSMC and Samsung are leading in the production of five-nanometer chips, with Intel relying on TSMC for chip production. The video showcases a facility that recycles and repurposes billions of gallons of water for chip manufacturing. Chips of different sizes are used in a variety of electronic devices, with a high demand for five-nanometer chips due to their advanced technology. Intel is facing challenges with delays in chip production, particularly with the 10-nanometer chips which have been rebranded as Intel 4 or Meteor Lake. TSMC and Samsung are emerging as tough competitors with their three-nanometer nodes.

The global chip supply chain is at risk due to Taiwan's dominant position, as the country currently produces 92% of the world's five-nanometer chips, leaving it vulnerable to natural disasters and geopolitical tensions. Intel's strategy includes the development of an 18A chip by 2025, to outperform competitors and maintain long-term leadership.