ELPA Analysis
The advanced semiconductor supply chain remains one of the most fragile bottlenecks in the global economy. All frontier AI models run on chips manufactured by a single company (TSMC) using lithography machines from another single provider (ASML).
This absolute concentration of manufacturing capability makes the AI industry vulnerable to geopolitical shocks and supply chain disruptions. Even minor delays in chemical supply or lens manufacturing can halt global production of GPUs.
Governments are spending billions to build domestic fabs in the US and Europe, but building the complex ecosystem of suppliers, chemical engineers, and cleanrooms takes years, ensuring TSMC's dominance remains unchallenged for now.
