Sam Altman’s vision to remake the chip industry needs more than money

livemint.com:

OpenAI Chief Executive Sam Altman’s plan to reshape the global semiconductor industry envisions pouring vast sums into a challenge that is far more complicated than money. Manufacturing chips is enormously capital intensive. It is also one of the most intricately complex industries in the world with a history of sharp cyclical swings that have made companies wary of radical expansion.

It took decades for the world’s most advanced chip makers to reach their current heights. Some chip companies faltered during one of the industry’s notorious downturns, like in the early and middle 2010s. Others stopped developing cutting-edge chips along the way, wary of high costs and the high risk of failure.

There are now only three companies in the world capable of making the most cutting-edge chips—including the processors used to power AI systems—in large volumes: Taiwan Semiconductor Manufacturing Co., Samsung Electronics and Intel. Altman has held discussions with chip makers about joining with them and using trillions of dollars to build and operate new factories, along with investments in energy and other AI infrastructure. Many of the world’s largest chip companies, including Nvidia, design their chips but outsource their production to companies such as TSMC.

Building a cutting-edge chip factory typically costs at least $10 billion. But even with that, the scale Altman is discussing is extreme: Stacy Rasgon, an analyst at Bernstein Research, estimates that a little more than $1 trillion had been spent on chip-manufacturing equipment in the entire history of the industry. Money, however, isn’t the only ingredient needed to succeed in one of the most complex forms of manufacturing in existence.