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Answering this questionWhy are the most advanced chips so difficult to manufacture?
The explanation below answers this question. Broader context for What happens when computer chips can no longer keep getting smaller? follows afterwards.
The deeper explanation
The answer in detail
The answer follows the chain of production, transport, rules and bargaining power that connects a local outcome to global supply.
Why it matters
Chip progress shapes the price and capability of phones, vehicles, AI, industry and national security.
A factory is a geopolitical system
The tools and materials come from a global network, so export controls, transport interruptions or a single supplier failure can affect output months later.
Governments subsidise fabs because advanced chips support phones, cars, defence and AI; public money is now part of the economics of private semiconductor competition.
System lens
What makes this more complicated?
Three layers that help explain what changes the outcome.
Starting conditions
Evidence, available capability and access set the starting position before the technology reaches everyday use.
Limits and trade-offs
Rules, capacity and competing priorities limit which responses are practical, even when several options look possible.
Choices and distribution
The outcome depends on who can change those conditions and how its consequences are shared.
What happens when computer chips can no longer keep getting smaller?
Shared background, people, references and other questions for this story collection.
Read the main storyMeet the players
The next improvement in a chip may come from its designer, its factory, the machine that prints its circuits or a research lab. These players control different parts of that journey.
TSMC
Makes and packages other companies’ chips
Wants tomake customers’ increasingly complex chip designs manufacturable at a workable cost.
Read profile: TSMC
Taiwan Semiconductor Manufacturing Company operates factories used by designers such as AMD. Its 3DFabric technologies also connect separate pieces of silicon side by side or in stacks, so progress need not come only from smaller transistors.
Customers must design within the processes and packaging options a factory can reliably deliver. TSMC, in turn, depends on equipment suppliers and on manufacturing enough working chips from each batch. A design that works on paper is not automatically economical to produce.
What to watchWhether new packaging and transistor processes deliver enough working products to justify their cost.
ASML
Supplies machines that pattern tiny circuits
Wants tohelp chip factories print finer features accurately and repeatedly.
Read profile: ASML
ASML builds lithography machines: they project a circuit pattern onto a light-sensitive coating on a silicon wafer. Its extreme-ultraviolet machines use very short-wavelength light to pattern tiny features.
ASML depends on specialist suppliers, including ZEISS for precision optics. Its customers still need many other manufacturing steps to turn a printed pattern into working chips. Dutch export licences also determine which controlled machines it can ship abroad, so technical capability alone does not determine access.
What to watchWhether sharper patterning delivers reliable factory output, and where export licences allow the equipment to go.
AMD
Builds processors from connected chiplets
Wants toincrease computing performance without making every processor one enormous, costly piece of silicon.
Read profile: AMD
AMD splits some processors into smaller pieces called chiplets. Different functions can use different manufacturing processes, reserving the newest, more expensive process for the parts that benefit most.
That changes the task from simply shrinking a chip to connecting its pieces efficiently. Communication between chiplets and packaging add design challenges. AMD relies on external manufacturers, including TSMC, so its launch plans also depend on factory capacity and the proportion of chips that pass testing.
What to watchWhether faster connections between chiplets preserve the performance and cost advantages of splitting a processor.
Intel
Changes transistor design and chip assembly
Wants tokeep improving processors through new transistor structures, power delivery and packaging.
Read profile: Intel
Intel’s RibbonFET design surrounds the transistor’s conducting channel with its controlling gate. PowerVia moves power connections to the back of the chip, freeing space for signal wiring. Its Foveros technology stacks chip pieces.
These approaches change the shape and arrangement of a processor rather than relying solely on smaller features. But the parts must still be manufactured, connected, powered and cooled together. Intel’s factories and its chip designers therefore have to solve several engineering problems at once.
What to watchHow transistor, power-delivery and packaging improvements work together in manufactured processors.
Sources: [1]
imec
Tests what could come after today’s silicon
Wants toturn promising transistor materials into processes that chip factories could use.
Read profile: imec
This Belgian research organisation works with manufacturers and equipment makers. In June 2026, imec, TSMC and ASML reported transistors using atomically thin materials on industry-standard 300-millimetre wafers.
Making a promising laboratory device is different from producing reliable commercial processors. Materials must survive the manufacturing sequence and work consistently across a wafer. Collaboration lets researchers test those obstacles against factory requirements; the demonstration does not mean silicon has already been replaced.
What to watchWhether experimental materials remain reliable when integrated into a complete manufacturing process.
Sources: [1]
Dutch government
Licenses exports of controlled chip equipment
Wants tolimit sensitive uses of advanced chipmaking equipment while avoiding unnecessary disruption to the industry.
Read profile: Dutch government
Because ASML exports from the Netherlands, Dutch licensing decisions matter to access to controlled equipment. Rules expanded in April 2025 to include specified measurement and inspection tools as well as existing controls.
Applications are assessed individually for exports covered by these rules to destinations outside the EU; this is not a blanket ban on every machine. The government can restrict a shipment, but it cannot remove the manufacturing difficulties faced by a factory that receives one.
What to watchWhich equipment requires permission and whether licences are granted for particular destinations and uses.
Sources: [1]
Lisa Su
AMD chief executive shaping chiplet and advanced-computing strategy
Wants toincrease computing performance while keeping complex designs manufacturable
LeverageProduct strategy, engineering investment and relationships with foundries.
Read profile: Lisa Su
As AMD’s chief executive, Lisa Su has made chiplet-based processors and advanced packaging central to the company’s product strategy. Her decisions matter because progress can come from connecting several pieces of silicon, not only shrinking one piece.
She can direct product priorities and engineering investment, but AMD depends on foundries, packaging capacity, equipment and customers. Manufacturing yield and the cost of connecting chiplets constrain what the strategy can deliver.
What to watchWhether AMD’s packaging choices deliver a performance advantage without making processors too expensive to manufacture.
Portrait: image source
Morris Chang
TSMC founder whose foundry model changed chip production
Wants tobuild a manufacturing model in which designers can use an independent specialist foundry
LeverageA production model that separated chip design from ownership of the factory.
Read profile: Morris Chang
Morris Chang founded TSMC and helped establish the specialist foundry model: one company designs a chip while another manufactures it for many customers. That structure explains why a small number of factories can influence the entire industry.
He no longer runs TSMC day to day, so his role is historical rather than operational. The model he created still shapes dependence on manufacturing capacity, process technology and long-term investment.
What to watchWhether the foundry model can remain resilient as fabrication becomes more expensive and strategically contested.
Sources: [1]
Portrait: image source
Sources & visual credits
- TSMC · 3DFabric stacking and advanced packaging
- ASML · How lithography works
- ZEISS · Optics inside EUV lithography systems
- AMD · Chiplet architecture explained (PDF)
- AMD · 2025 annual filing, manufacturing dependencies
- Intel · Transistors, power delivery and advanced packaging
- imec · Joint 2D-material transistor research, 15 June 2026
- Dutch government · Equipment export licensing, effective April 2025 (Dutch)
Flags and logos identify the actors; they do not imply endorsement.
- TSMC wordmark — Wikimedia Commons. Public-domain artwork; applicable trademarks remain with their owners.
- ASML logo — Wikimedia Commons. Public-domain artwork; applicable trademarks remain with their owners.
- AMD logo — Wikimedia Commons. Public-domain artwork; applicable trademarks remain with their owners.
- Intel logo — Wikimedia Commons. Public-domain artwork; applicable trademarks remain with their owners.
- imec logo — Butterslides, Wikimedia Commons, CC BY-SA 4.0. SVG wrapper and metadata cleaned; artwork unchanged.
- Dutch flag — Wikimedia Commons. Public-domain artwork; applicable trademarks remain with their owners.
Story collection
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Open a question to read its explainer and follow the linked questions in this collection.
A quick glossary for this collection.
TransistorA tiny electronic switch used to process information.
SemiconductorA material whose electrical behaviour can be controlled.
LithographyThe process used to pattern extremely small chip features.
ChipletA small specialised chip combined with others in one package.
Process nodeA label for a generation of chip manufacturing technology.
PrototypeAn early version built to test an idea.
Sources for the whole story
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