The Semiconductor Value Chain, From Design to Factory

Taiwan Semiconductor Manufacturing Company (TSMC) earned 51.8% of its 2025 revenue from chips built on two sizes of circuit, 3 nanometre and 5 nanometre. Both sizes need a printing technology that one company calls unique to itself. ASML is that company, a Dutch maker of chip-printing machines.

No single firm makes a modern chip. A phone processor is designed in one country, drawn with software from another, then printed on machines from a third. This guide walks the chain link by link, naming the companies in each one.

A chip starts as design software, then a set of bought-in circuit designs. A chip company turns those into a blueprint. Equipment makers supply the machines that build it.

A foundry then prints the circuits onto silicon wafers, the polished discs that chips are made on. Memory makers run their own version of that factory step. Packaging and test firms cut the wafers up, wrap each chip and check it works.

The chart takes one company from each link, with its latest reported full-year revenue. Design and memory are large, while the software and licensed designs that everything starts from are small.

A small link can still stop the whole chain, because every chip has to pass through it.

A billion transistors cannot be laid out by hand. Electronic design automation (EDA) software places the circuits, checks they work and prepares the files a factory needs.

Two firms dominate it. Synopsys took $7.1 billion of revenue in its year to 31 October 2025. Cadence Design Systems took $5.3 billion in its year to 31 December 2025. Both are small next to the chips their software draws.

Arm sells a different thing: ready-made processor designs that others build into their own chips. Arm's revenue in its year to 31 March 2026 was $4.9 billion, of which 53.1% was royalties.

Arm is paid once for the licence, then again on every chip shipped, which turns it into a toll on volume.

A fabless company designs a chip, then pays someone else to make it. It sells the finished part under its own name and keeps the design.

Nvidia, Advanced Micro Devices, Qualcomm and Broadcom all work this way. Nvidia's revenue was $215.9 billion in its fiscal year to 25 January 2026, up from $130.5 billion the year before.

Nvidia's gross margin was 71.1%. Gross margin is revenue less the direct cost of making the product, as a share of revenue. Nvidia buys its wafers from a foundry, so that purchase sits in the cost. The 71.1% is what it charges above it.

This link is crowded with companies, yet concentrated in money. Broadcom's fiscal 2025 revenue was $63.9 billion, Qualcomm's $44.3 billion and Advanced Micro Devices' $34.6 billion, so Nvidia alone was bigger than those three together.

Five firms supply most of the factory equipment. ASML is Dutch. Applied Materials, Lam Research and KLA are American. Tokyo Electron is Japanese.

Printing the circuit pattern is only one step. Other machines lay down thin films of material, which is deposition, then cut the pattern into them, which is etch. More machines measure and check the result.

Applied Materials sells machines for etch, deposition, metrology and inspection, on revenue of $28.4 billion in its year to 26 October 2025. Lam Research, at $23.2 billion to 28 June 2026, sells deposition, etch and cleaning machines. Tokyo Electron sells deposition, etch and cleaning machines too.

KLA, at $13.6 billion to 30 June 2026, sells the inspection and metrology machines a factory uses to hold its yield. Yield is the share of chips on a wafer that work.

ASML makes the lithography machines that print the pattern onto the wafer. Its extreme ultraviolet (EUV) machines use light with a wavelength of 13.5 nanometres. ASML calls that technology unique to it.

The chart splits ASML's 2025 system sales by the light each machine uses. EUV prints the finest patterns. ArF immersion, ArF dry, KrF and i-line are its deep ultraviolet machines, which use longer wavelengths and print coarser patterns.

Metrology and inspection machines measure the wafer instead of printing on it.

ASML sold 535 systems in 2025. Of those, 327 were lithography machines, which print the pattern. The other 208 were metrology and inspection tools, which measure wafers but do not print.

The 48 EUV machines were 14.7% of the lithography machines, 9.0% of all systems, but 47.4% of system revenue. System revenue is what ASML earns from selling systems: €24.5 billion of its €32.7 billion total for 2025.

ASML reports in euros. The average EUV machine went for €241.7 million. There is a fuller account in what ASML does.

A foundry owns the factory. It charges per wafer, so it needs its machines busy and its yield high. Foundries are capital-heavy, with long investment cycles.

TSMC, Samsung, Intel, United Microelectronics Corporation (UMC) and GlobalFoundries are the main names. Samsung appears again under memory, because it runs foundries for other companies as well as making its own chips.

TSMC's 2025 revenue was $121.4 billion on its own dollar translation, at a gross margin of 59.9%. UMC, which makes older and cheaper chips, had a gross margin of 29.0% on 2025 revenue of $7.6 billion. Intel's 2025 revenue was $52.9 billion, GlobalFoundries' $6.8 billion.

The difference between TSMC's 59.9% and UMC's 29.0% is the leading edge, meaning the newest and smallest circuit sizes. A process node is the name for one of those sizes. The chart splits TSMC's wafer revenue by node.

The 3 and 5 nanometre nodes were 60.3% of TSMC's wafer revenue in 2025. The chart rounds each node on its own, to 24.3% and 36.1%, which is why the two bars add to 60.4%.

Wafer revenue was 85.9% of TSMC's total 2025 revenue. The other 14.1% came from packaging, testing, mask making and other services. So 60.3% of wafer revenue works out at the 51.8% of total revenue at the top of this guide.

Both of those nodes need EUV machines. Older nodes are made on equipment that many factories own, so they earn much less.

Memory chips store data instead of processing it. The main makers are Micron plus two Korean firms (Samsung and SK Hynix). Memory makers design their own chips and run their own factories, so they hold two links at once.

The product is close to standardised, so prices swing hard. Micron shows the swing. Its revenue was $133.2 billion in the year to 3 September 2026, against $37.4 billion the year before.

The filed figures, $133,188 million and $37,378 million, are a rise of 256.3%. Micron's gross margin went from 39.8% to 80.7% between those two years. Memory earnings tell you about the price of memory, far more than about the company.

Once a wafer is printed it is cut into individual chips. Each one is wrapped in a package that connects it to a circuit board, then tested.

Specialists do much of this work (ASE Technology Holding, Amkor Technology), with ASE at $20.6 billion of 2025 revenue and Amkor at $6.7 billion.

Advanced packaging has become a chokepoint of its own. Stacking several chips into one part now limits how many top-end parts can be built, so the foundries do more of it themselves.

The first is EUV lithography. Only 48 machines were sold in 2025. ASML itself buys its optics from a single supplier (Carl Zeiss SMT) under an exclusive arrangement.

The second is leading-edge foundry capacity. Very few factories can print at 3 nanometre, so the ones that can set the queue.

The third is advanced packaging, which decides how fast finished parts reach customers even when the wafers exist.

Nearly every company named here sits in one sector, Information Technology, as the 11 stock market sectors sets out. The pricing power in this chain sits at the chokepoints, where only one or two suppliers can do the step at all.

It is the chain of separate businesses a chip passes through. Design software and licensed designs come first, then the chip designer, the equipment makers, the foundry that prints the wafers, the memory makers, then packaging and test. Most firms work in one link only.

A foundry makes chips to other companies' designs and charges per wafer. TSMC, Samsung, Intel, UMC and GlobalFoundries are the main ones. TSMC's 2025 revenue was $121.4 billion at a gross margin of 59.9%. A foundry owns the factory, while a fabless designer owns the blueprint.

ASML makes the lithography machines that print circuit patterns onto wafers. It calls its extreme ultraviolet technology unique to it. Those machines are needed for the smallest circuits. It sold 48 of them in 2025, at an average of €241.7 million each in its euro accounts.

Nvidia, Advanced Micro Devices, Qualcomm and Broadcom design chips and pay foundries to make them. Nvidia's revenue was $215.9 billion in its year to 25 January 2026, at a gross margin of 71.1%. The foundry's price for the wafer is part of Nvidia's cost.

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