TOPIC 2.6

Semiconductor Companies & Roles

⏱️25 min read
📚Industry

TOPIC 2.6

Semiconductor Companies & Roles

⏱️26 min read

📚Industry Players

The semiconductor industry is characterized by intense specialization, with different companies occupying distinct roles in the value chain. Understanding these companies and their functions reveals the complex interdependencies that power the digital economy.

Equipment Manufacturers: The Enablers

ASML: The EUV Monopoly

ASML Holding (Netherlands) occupies perhaps the most strategically critical position in the entire semiconductor ecosystem: it is the sole commercial supplier of Extreme Ultraviolet (EUV) lithography systems. These machines, which cost $150-400 million each, are absolutely essential for manufacturing chips at 7nm and below.

ASML's EUV systems took over 30 years and approximately $9 billion to develop. The technology generates 13.5nm wavelength light by focusing a high-powered laser onto tiny droplets of molten tin traveling at 70 meters per second, creating a plasma that emits EUV photons. These photons are captured by ultra-precise multilayer mirrors polished to atomic smoothness.

By 2025, ASML is delivering next-generation High-NA EUV systems costing approximately $370 million each. ASML's monopoly has made it a critical geopolitical player— the Dutch government, under US pressure, has restricted exports of EUV systems to China since 2019.

Applied Materials, Lam Research, Tokyo Electron: Deposition and Etch

Applied Materials (United States) is the market leader in semiconductor manufacturing equipment with a broad portfolio spanning deposition and etch systems. The company reported revenues exceeding $27 billion in recent years and serves as a critical supplier to all major foundries.

Lam Research (United States) specializes in wafer fabrication equipment for deposition, etching, and cleaning. The company's equipment is particularly critical for the multi-patterning techniques required when using DUV lithography to create features smaller than the light wavelength.

Tokyo Electron (Japan) is the third major competitor in deposition and etch equipment, with particularly strong positions in coater/developer systems used in conjunction with lithography. The Japanese company is investing ¥1.5 trillion (approximately $10 billion) over five years in R&D.

KLA: The Eyes of the Fab

KLA Corporation (United States) is the undisputed leader in process control— the metrology and inspection systems that act as the "eyes" of the fab. As feature sizes shrink to nanometer and sub-nanometer scales, detecting defects and ensuring manufacturing precision becomes exponentially more difficult and critical. KLA's highly sophisticated tools measure feature dimensions, layer thickness, overlay accuracy, and detect defects using advanced optical techniques, electron beams, and X-rays.

Foundries: The Manufacturers

TSMC: 70% Market Dominance

TSMC (Taiwan Semiconductor Manufacturing Company) is the undisputed leader in semiconductor manufacturing, holding approximately 70.2% of the global foundry market share as of Q2 2025. Founded in 1987 by Morris Chang, TSMC pioneered the pure-play foundry model— manufacturing chips designed by other companies without competing in chip design.

TSMC's customers include Apple (iPhone and Mac processors), NVIDIA (AI GPUs), AMD (CPUs and GPUs), Qualcomm (mobile processors), and hundreds of other fabless companies. The company operates massive fabs in Taiwan, with major expansion underway in Arizona ($165+ billion), Japan, and Germany.

Samsung Foundry: The Challenger

Samsung Foundry (South Korea) holds approximately 7.3% market share and operates as part of Samsung Electronics' broader semiconductor business. Samsung is pursuing GAA (Gate-All-Around) transistor technology aggressively with its SF2 2nm process launching in 2025. The company is investing over $37 billion in two advanced logic fabs and an R&D center in Taylor, Texas.

Intel Foundry Services: The Comeback Attempt

Intel Foundry Services represents Intel's ambitious effort to transform from an IDM focused on its own products into a major foundry serving external customers. Under CEO Pat Gelsinger, Intel is executing a "five nodes in four years" strategy to regain process leadership.

The cornerstone is the 18A process node (equivalent to 1.8nm), combining RibbonFET (Intel's implementation of Gate-All-Around transistors) and PowerVia (backside power delivery). Intel is building new fabs in Arizona, Ohio ($28+ billion, delayed to 2030-2031), New Mexico, and Ireland.

GlobalFoundries and Specialized Players

GlobalFoundries deliberately opted out of the bleeding-edge race, focusing instead on "differentiated technologies" for automotive, IoT, and communications. SMIC (China) holds approximately 5.1% market share and has achieved remarkable breakthroughs using DUV multi-patterning to manufacture 7nm-class chips despite lacking access to EUV.

Fabless Chip Designers: The Innovators

NVIDIA: The AI Accelerator King

NVIDIA has ascended to the top position among semiconductor companies by revenue in 2024, capturing 11.7% market share driven by its near-monopoly in AI training GPUs. The company's Hopper (H100) and Blackwell architectures have become the industry standard for AI infrastructure.

NVIDIA's dominance stems from superior GPU architectures with specialized Tensor Cores, CUDA software platform creating massive ecosystem lock-in, first-mover advantage in AI hardware, and comprehensive solutions including networking. NVIDIA's 2024 revenue reached $76.692 billion, with approximately 40% coming from just two customers. The company holds an estimated 80% market share for AI accelerators.

AMD: The Open Ecosystem Challenger

AMD positions itself as NVIDIA's primary challenger in both data center CPUs and AI accelerators. In 2025, AMD's portfolio includes EPYC 9005 "Turin" server CPUs based on Zen 5 architecture using chiplet design, Instinct MI350 AI accelerators competing with NVIDIA's flagship GPUs, Ryzen 9000 series consumer CPUs, and Radeon RX 9000 series GPUs.

AMD's strategy emphasizes providing an open-ecosystem alternative through its ROCm software platform, attracting customers wary of NVIDIA's proprietary CUDA lock-in.

Qualcomm: Mobile and PC Expansion

Qualcomm dominates mobile processors for Android smartphones with its Snapdragon platforms. In 2025, Qualcomm is making an aggressive push into PC markets with the Snapdragon X2 Elite, a high-performance ARM-based processor challenging Intel and AMD's x86 dominance in Windows laptops. The Snapdragon 8 Elite Gen 5 mobile SoC emphasizes on-device "agentic AI" capabilities.

Apple: Vertical Integration Master

Apple has achieved remarkable success with vertical integration, designing custom ARM-based silicon for all its products. The M-series chips (M1, M2, M3, M4, M5) demonstrate the power of unified architecture across Mac computers, iPads, and Apple Vision Pro. The M5 chip (2025) features a revolutionary GPU architecture with integrated Neural Accelerators, delivering 4x AI performance improvement over M4.

Apple's control over both hardware and software enables optimization impossible for competitors. All Apple chips are manufactured exclusively by TSMC at the most advanced nodes.

The Chinese Ecosystem

SMIC: Foundry Under Sanctions

SMIC (Semiconductor Manufacturing International Corporation), China's national foundry champion, has made remarkable advances despite stringent US export controls. Denied access to EUV lithography, SMIC has achieved mass production of a 7nm-class process using DUV multi-patterning, manufacturing chips for Huawei's Kirin 9000s processor.

Huawei HiSilicon: Design Despite Restrictions

Huawei's chip design subsidiary HiSilicon continues developing advanced processors despite US sanctions limiting manufacturing options. The Kirin 9000s demonstrates China's determination to achieve technological sovereignty regardless of cost.

Indigenous Equipment Development

China's semiconductor equipment self-sufficiency rate is expected to reach 50% by end of 2025, a direct result of "Big Fund 3.0" investments focused on indigenous equipment manufacturing. This represents a strategic effort to reduce dependence on Western equipment suppliers.

🎯 Key Takeaways

  • ASML's monopoly as sole EUV supplier with machines costing $370M each enables all sub-7nm manufacturing; Dutch export controls to China since 2019 create a technological ceiling and geopolitical leverage point
  • Applied Materials, Lam Research, and Tokyo Electron dominate deposition/etch equipment; KLA monopolizes metrology/inspection; this concentration creates supply chain vulnerabilities and export control battlegrounds
  • TSMC's 70.2% market share creates single point of failure for advanced chips; Samsung Foundry (7.3%) and Intel Foundry Services compete but lag in process leadership; all depend on same equipment suppliers
  • NVIDIA dominates AI accelerators (80% share, $76.7B revenue) through CUDA lock-in; AMD challenges with open ROCm ecosystem; Apple, Qualcomm exemplify vertical integration and specialization strategies

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