HomeOpinionVIA ClubWHO WILL BE THE BIGGEST WINNER IN THE CHIP WORLD? | INTEL, SAMSUNG, TSMC, SMIC
WHO WILL BE THE BIGGEST WINNER IN THE CHIP WORLD? | INTEL, SAMSUNG, TSMC, SMIC
December 14, 2020
The Demise of Intel
Intel used to be the holding close to a monopolistic position in the CPU world. If there is a computer, most likely you will have an “Intel Inside”. However, it is now 2020 and the definition of a computer is far from just a desktop or a laptop computer. Your phone, iPad or even smart devices around your home are all mini computers. And most if not all of them are not run on Intel.
This development is not only telling us the demise of Intel, but it is also showing us the growth of the fabless business model in the wafer industry.
To Fab or Not to Fab
Intel is a unique chip manufacturer. This is because it is one of the few integrated chip manufacturers in the world left. It can design and manufacture its silicon chip by itself. This is in sharp contrast to most other Integrated Circuit (IC) designers like Nvidia, AMD, Apple, Hisilicon and Qualcomm, where the manufacturing is outsourced to a foundry.
Foundry is a market that has been consolidating over the past decades. Today, there are only a small number of large-scale foundries. Among them, Taiwan Semiconductor Manufacturing Company (TSMC) controls more than 50% of the market.
More and more electronics manufacturers are planning to ditch Intel. Apple has announced that it will be transitioning from Intel chips to their own Apple Chips across all their devices within the next two years. Microsoft is working with Qualcomm to explore an ARM-based chip for its surface products. Nvidia is also in the process to acquire ARM from Softbank and that could lead to Nvidia entering the CPU market in the laptop and desktop space. All this means that Intel is slowly being edged out from its market.
More importantly, all these challengers, be it Apple, ARM, Nvidia, Qualcomm, are all manufacturing through foundries.
The Troubles At Intel
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Stanley Lim has spent the last decade in the investment industry. Over the course of his career, he has kick-started a few businesses, worked in the family office industry and most recently in the investment advisory industry. He has been a writer and analyst for The Motley Fool Singapore from 2013 to 2017. He has written close to 2000 articles online, on investment education and market analysis. He is the co-writer of the investment book: “Value Investing In Asia”, published in 2018. Stanley is currently the chief editor of Value Invest Asia.