Silicon chokepoints: the eight companies manufacturing the world's advanced chips

What it is

The semiconductor beat tracks the manufacturing infrastructure that determines how much AI compute the world can build and who controls it. The site tracks eight companies because together they sit at every bottleneck: three foundries (TSMC, Samsung Foundry, SMIC), two Korean memory leaders that also run foundry operations (Samsung, SK Hynix), one US memory entrant (Micron), one US integrated device maker repositioning as a foundry (Intel), and the Dutch company without which no leading-edge chip can be manufactured (ASML). Advanced-node capacity, currently at 2nm and below, determines which country's AI-accelerator programs can scale, at what cost, and subject to whose export laws.

History

The integrated circuit was commercialised in the United States in 1958-1959. The US dominated the industry through the 1970s before Japan's MITI-backed DRAM expansion forced the first US legislative response: the Semiconductor Trade Agreement of 1986. South Korea entered next: Samsung began memory production at scale in the mid-1980s, SK Hynix (then Hyundai Electronics) in the early 1990s. Taiwan's decisive contribution was structural: Morris Chang founded TSMC in 1987 as a pure-play foundry, separating design from fabrication and enabling the fabless chip industry. ASML shipped its first EUV production scanner in 2013 after roughly €6 billion and 17 years of development; no competitor has replicated it. China entered late with SMIC, founded in 2000, then placed on the US Entity List in December 2020. The 2020-2021 auto-chip shortage exposed geographic concentration, accelerating the US CHIPS and Science Act (signed August 2022, US$52.7 billion) and parallel programs in the EU, Japan, South Korea, and India.

Current state

The Semiconductor Industry Association reported full-year 2025 global chip sales of US$791.7 billion, up 25.6%, with logic up 39.9% and memory up 34.8%. The industry is on track to cross US$1 trillion in 2026 for the first time. The driver is AI: hyperscale data-centre buildouts pull on every layer of the supply chain simultaneously, from ASML's EUV machines (backlog €38.8 billion at year-end 2025) to high-bandwidth memory and advanced packaging. TSMC held 72.3% of global foundry revenue in Q1 2026. Micron's HBM4 capacity for fiscal 2026 sold out months in advance at record gross margins. SMIC reported US$9.33 billion in 2025 revenue, up 16.2%, with US$8.1 billion in capital expenditure as China's Big Fund III underwrites the cost of producing 7nm chips without EUV.

Relationships

ASML sells EUV machines to TSMC, Samsung, Intel, Micron, and SK Hynix; SMIC cannot legally import any. TSMC packages HBM stacks made by SK Hynix, Samsung, and Micron onto AI accelerators via its CoWoS advanced-packaging line, making TSMC a bottleneck inside the memory supply chain as well as the logic one. Samsung's foundry and memory divisions compete for the same capital, giving SK Hynix a structural focus advantage. Micron is the only US-headquartered HBM supplier and is gaining qualification share from the Korean incumbents. SMIC's N+2 7nm output feeds Huawei Ascend AI accelerators, the chip China AI labs use where Nvidia is banned.

The combined Korean capex plans and the South Korea megaproject cluster of June 2026 reflect the decade-long capital cycles this demand pulls. Memory tightness propagates downstream: Apple raised MacBook and iPad prices in June 2026 citing AI-driven memory costs. Micron's record fiscal Q3 2026 (US$41.45 billion revenue, 84.9% gross margin) confirmed the HBM supercycle is structural. China's state capital responds: Beijing's anti-involution industrial policy channels Big Fund III directly to SMIC's advanced-node losses. Materials supply for ASML's European supplier base gives Kazakhstan's June 2026 EU deal package relevance beyond trade diplomacy.

What to watch

• TSMC Arizona Fab 2 (3nm, targeted H2 2027): the key US benchmark for geographic diversification of advanced logic.
• SMIC's 5nm DUV pilot: mass production in 2026 narrows China's gap by one node and raises US pressure on remaining DUV and chemical export controls.
• HBM4 allocation for Nvidia's Vera Rubin platform, and whether Micron takes durable share from SK Hynix before 2027.
• Intel 14A customer commitments in H2 2026, which determine whether the US operates a second leading-edge foundry in practice.
• Whether global 2026 chip sales sustain the US$1 trillion trajectory, or AI-capex cyclicality sets in before year-end.