I've been reading Fabless: The Transformation of the Semiconductor Industry lately, and there's a whole bit in there about TSMC. TSMC was the first company to

I've been reading Fabless: The Transformation of the Semiconductor Industry lately, and there's a whole bit in there about TSMC. TSMC was the first company to be a "pure-play" company that did no design work and only manufactured orders. This was back in the days when the guys at Intel and IBM had the attitude that to be a real player in the industry, you had to have your own fab. But there was an increasing amount of fabless design houses in the US that would piggyback off the excess fab capacity that Intel/IBM had after they were done with their own chips, and TSMC targeted that demand by tables companies for manufacturing capacity directly. The takeaways I got was fabs moved away from the US because TSMC and the like figured out an innovative business model that let them focus on a single part of the supply chain that provided substantial cost savings for all these new fabless companies in the US. Meanwhile, the old established players like Intel/IBM with fab experience weren't willing to hop on this new segment and kept their fab capacity mainly for making their own designs. Although TSMC started in a high capital low return segment, as opposed to fabless that could produce and capture most of the value in a chip design, the IP itself, TSMC eventually became so good at what they do and process nodes became so expensive to develop that no other US companies had the incentive to enter this segment from scratch and lose money for years before catching up with TSMC for frankly not very high returns. The only US company keeping up with TSMC is Intel, and that's because they've been manufacturing from the start and have enough volume to make investing in a fab and spreading that fixed expenditure over all their chips worth it.