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Comment by barrkel | Hacker News Reader

Two European companies are mentioned as producing critical hardware for the process.

Yes, it's ASML and their technology partners in Europe (Zeiss, Trumpf, many others).

ASML is really at the core of bleeding edge semi. Their lithography equipment is basically unchallenged in the industry. Noone can make a 7nm CPU without them.

And I am quite happy.

But still there is a huge difference between being a provider of technology and actually using that technology.

Disclaimer: I've worked in several semiconductor companies mentioned in this article as hardware guy.

Actually it's quite liberating to be the provider of technology. You control the whole market. Specially true for some of the companies which are virtual monopolies (over 95% of the market is owned by them). In EUV side, which is the future (happening now), some vendors are the only option. Fabs can pressure them, of course, but at the end of the day they are the only vendors available. I find it quite funny, on one hand TSMC is one of those "jump? Where and how high" kind of customer but OTOH there is no one else they can turn to. I find this kind of relationship quite funny and unique. I am not aware of any other industry where the vendor has this much power. All because they are the only supplier. Maybe in defense?

Can you share more?

I would love to know better this kind of dynamics.

Why TSMC or other fabs don't develop the same technology in house? How the technology is protected? Why there are not other competitors?

Moreover, what that means from the company point of view? I guess there is not a big push to innovate, isn't it?

Developing a state of the art wafer scanner for EUV lithography would probably take decades, many billions of dollars (not tens but more likely closer to $100B), violate thousands of patents and the end result would 100% be inferior to what the entrenched players (which for EUV lithography is de facto only a single company, ASML) have on offer today, which means it would actually put you at a competitive disadvantage as a foundry, compared to competitors that just buy the state of the art machines. Add to that it already takes huge effort and investment to run a fab, semiconductor manufacturing isn’t a process where you just get some gear, then press a button and wait until the chips roll out. It takes billions and months to years to just switch to a new process node. That’s TSMC’s core business: using the tools to make chips, not make the tools themselves, and that’s already extremely hard. It’s not a coincidence there are basically only 3 big players left that can compete at the most advanced process nodes.

Development on ASML NXE EUV scanners started ~20 years ago and only since very recently are they being used for high volume production. There is literally zero chance anyone would be able to profitably build the same thing from scratch again, at least not unless they find some radically different way to make semiconductors.

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