Exists in the shadow of TSM

$GlobalFoundries(GFS.US)$GlobalFoundries faces many of the same challenges that a market entrant would face. $Taiwan Semiconductor(TSM.US)$has a massive lead on the rest of the competition. A customer who wants the best chips in the world pretty much has to buy from TSMC. Samsung has remained competitive, but it has faced challenges with its 10 nanometer (nm) and 8nm chips, which led to many of its customers ditching it for TSMC. TSMC is not a monopoly, but any discussion of the chip industry and winners and losers has to factor in the bare fact that TSMC is the best and largest chipmaker in the world. China has tried to throw money at the problem with the $SMIC(00981.HK)$, but sanctions and technical challenges mean that even with money, SMIC struggles.

$Intel(INTC.US)$and GlobalFoundries are highly reliant on potential federal government aid to help them get past TSMC. There is no scope for startups. On their own, these two US chipmakers are too far behind TSMC to be a credible threat. That means they will struggle to steal market share, unless non-product issues such as Sino-American competition and concerns over a potential Chinese invasion scare away customers. TSMC has been intelligent in this regard and is investing $12 billion in its Arizona 5nm plant.