Moore’s Law - The number of components that can be squeezed into a given area of silicon doubles roughly every two years.

Every company is racing to achieve this by reducing the number of impurities in production and optimising the process. This is why all fabs’ manufacturing process is quite secretive. Even the gases or chemicals used by one is unknown.

TSMC is obviously most-ahead, controls 90% share. This has happened because of a flywheel effect. The more chips they make, the more data they collect and the more they learn.

But the Moore’s Law is not a natural law, it just happens because of the race between fabs and the chip designers. Moore’s Law also talks about how, every time the number of transistors increases, the market increases. The recent advancements in chip manufacturing, allowed for this sudden jump in AI adoption because these new chips allowed for AI to be technically and economically viable. Previously, these advancement allowed for smartphones to become so powerful. Further advancements are just going to make AI infra cheaper, more accessible and even more powerful.

ASML’s (the most important chipmaking company in the world) shareholding pattern demonstrates that no company can make a chip on its own. Because fabs need ultrapurified materials and highly complex machines, they have to depend on a number of companies for their supply chain. While they are competitors, they are all shareholders of ASML, the largest manufacturer of Lithography Tools in the world. ASML itself has a very complex supply chain, due to the high complexity of its machine.

But what continues to be a great feat of our modern technology is the fact that even after such a large and complex supply chain, a chip produced as an output of this is so cheap for the entire world.

This is not a labour intensive process. Humans can’t achieve this level of precision or purity. A fab has only large machines and very less humans. Most of the process is automated.

2025 Chip Consumption of India = Rs. 4,05,000 Crores

Cost of advanced fabs = Rs. 81,000 Crores (Chris Miller says $20 Billion)

Cost of OSAT =

Cost of ATMP =

Government incentive for domestic production = Rs. 65,000 Crores, of which 62,700 have been committed

Challenges: