The Custom Silicon Land Grab

For most of the last decade the AI hardware story had a short cast: Nvidia designing, TSMC and Samsung fabricating, everyone else buying. That is no longer a complete description. Companies whose core business has nothing to do with semiconductors are moving into design and, increasingly, manufacturing.

Tesla and SpaceX have signalled plans for a large semiconductor plant of their own, and they are not alone in deciding that depending on a single supplier for the most strategically important component is an unacceptable risk.

Vertical integration buys control over cost and roadmap, but it also means absorbing an enormous capital and talent burden. Expect the next few years to separate the companies that genuinely needed custom silicon from the ones that discovered buying was cheaper after all.