Is everyone coming for Nvidia's lunch?

Right now, Nvidia and everyone else gets their advanced chips from TSMC which means Taiwan. That means if China ever tries invading that place, we South Korea and Japan with institute a naval blockade depriving China of the food and energy resources it needs to survive. It's that IMP.

Will the US eventually have our own chip factories so we are no longer reliant? Perhaps...that could take a decade or more?

Tuesday, December 16, 2025

Jackie Snow, Quartz Media

Chips, fabs, and the one advantage that's actually hard to copy

I-Hwa Cheng / AFP via Getty Images

Nvidia is currently worth more than $3 trillion by selling chips for tens of thousands of dollars apiece that they cannot make fast enough. Its CEO Jensen Huang has become a genuine celebrity, signing autographs and filling conference halls to rapacious applause. The company went from gaming graphics cards to the backbone of the global AI economy in roughly a decade, and in doing so became one of the most valuable businesses in the history of capitalism with no slowdown in sight.

So yes, companies are coming for Nvidia’s lunch. And it's dinner, too.

Some companies, like OpenAI and Google, are designing custom chips but still relying on outside manufacturers to make them. Others, like Amazon, are pairing chip design with software investment, betting that an open developer ecosystem is how you actually take market share.

Even Intel, which spent years watching the AI boom from the sidelines, is back in the game as a manufacturing partner for the most audacious play of all: building your own fabs from scratch. Elon Musk is planning a semiconductor city in Texas that could cost $119 billion.

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The castle and its moat

Nvidia itself does not own any fabs. It designs its chips and relies almost entirely on TSMC to manufacture them. When manufacturing capacity is tight, queue position is key. Any challenger trying to ramp up production at TSMC is essentially getting in line behind Nvidia's orders.

With that in mind, building your own fab might be the shrewdest move of all. You never get in Nvidia's line. You never threaten their customers. You just build something the world desperately needs and let demand do the rest.

But obstacles stack up fast. ASML, the Dutch company that makes the machines required for cutting-edge chip production, can only manufacture a limited number per year. Building more fabs does not help much if the tools to run them take years to procure.

Then there is just the sheer complexity of building the factory. TSMC arrived in Arizona and found that its finely tuned construction playbook did not travel well.

TSMC had to bring in thousands of workers to fill the gaps in the specialized knowledge needed that had quietly drained out of American manufacturing. Permitting that required one approval at home required thousands in the U.S., spread across municipal, county, state, and federal agencies.



The company ultimately had to draft 18,000 rules of its own just to navigate the process. Anyone planning to build a fab in America from scratch, with no institutional memory of doing it here, is starting from an even steeper place.

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And yet the timing has never been better for someone to try. TSMC's Arizona fabs are up and running, meaning the supplier ecosystem, the workforce pipelines, and the hard-won permitting knowledge are all starting to exist in America in ways they simply did not before.

Intel, keen to establish itself as a viable contract manufacturer, has signed on as Musk's chip-making partner, bringing decades of fabrication expertise. The data center construction boom of the last few years has taught the industry lessons about permitting, power procurement, and large-scale builds that transfer to fabs. ASML is expanding its manufacturing capabilities, with a new campus opening in 2028. The conditions that made all of this so hard even five years ago are slowly, unevenly, improving.

Musk, flush with cash from SpaceX's recent IPO and motivated by a need to fill data centers (including, eventually, ones in space) has already demonstrated he will simply go around bottlenecks rather than wait for them.

It is not even the first time the industry has had to build from scratch, according to Lizy John, a computer engineering professor at Texas A&M who researches chip performance and power efficiency. In the 1970s, companies like Motorola and Texas Instruments pulled workers from biology, teaching, and other unrelated fields and built 30-year careers out of them.

“The skills that are needed can be created by training,” she said. “It may be six months.”

That optimism feels right, even if the work is hard and the timeline is longer than anyone would like to admit. While AI companies chase each other building models that keep getting overtaken, leaked, or blacklisted, having a guaranteed supply of chips and a world full of customers desperate to buy the rest starts to sound less like an audacious bet and more like a pretty good business.



—Jackie Snow, Contributing Editor