But far from being at the end of the transistor innovation journey, Intel’s Ben Sell, vice-president of technology development, suggests we are right “in the middle” of it. What is particularly exciting, he says, is that chip innovations discussed “for decades” are now being seen in devices on the market.
But success is not guaranteed — and the stakes are high. Global chip sales hit well over $500bn last year and semiconductors could become a trillion-dollar industry by the end of this decade, according to consultants McKinsey.
“That’s like getting to GDP scales of things that the companies are competing over,” says Jeff Koch, analyst at SemiAnalysis, an independent research company specialising in semiconductors and AI.
The technological reputation and financial standing of companies and governments depends on the right bets being made.
TSMC, with its market capitalisation of $575bn, dominates Taiwan’s economy and the global market for the world’s very smallest cutting-edge chips.
That is something the Biden administration hopes to change with its Chips Act, pledging $52bn of incentives to encourage companies to base fabrication plants on US soil. But many experts believe the erosion of US chip manufacturing over a number of decades has made it hard for the country to regain global competitiveness.
China is also entering the race, with the country’s biggest chipmaker SMIC expected to make next-generation smartphone processors as early as this year — despite US efforts to restrict Beijing’s chip advances through export restrictions on specialist equipment.
Nvidia and Advanced Micro Devices (AMD) are also battling for technical supremacy and market share in the field of AI chipmaking, given the soaring demand for the processors that power OpenAI’s ChatGPT and similar apps.
AMD revealed a raft of technical advances in December, including packing 153bn transistors and 192 gigabytes of memory into its new MI300 chip, in a bid to take on the world’s most valuable chip company, Nvidia. Last week, Nvidia’s market value soared to $2tn, leapfrogging Amazon and Alphabet to become the third most valuable US-listed company, behind Microsoft and Apple.
AMD, meanwhile, brought in revenues of $23bn in 2023 and expects to sell $3.5bn-worth of its latest chips this year. It is the second-most-valuable semiconductor company in the US — overtaking Intel in 2022. Intel is also bidding for a place in the AI landscape, announcing it will be building Microsoft’s high-end chips.
Chip construction
A diminishing number of companies have been able to keep pace in the race to build the most advanced smartphone chips in recent years. The design and manufacturing processes have become extremely long, complex and costly, requiring ever more specialist equipment and knowledge.
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