Arab Academy for Science, Technology and Maritime Transport
Graduate School of Business
Master of Business Administration (MBA)
Marketing Research
Lecturer:
-
Group Participants:
Project Topic
- The Demand Explosion: Why the World Can't Get Enough Chips (Semiconductors).
Abstract
- This report summarizes ten articles related to the project topic, by identifying the variables found in each article.
The articles discuss: 1- What are the uses of semiconductors in our daily life and what is the history of its
development? 2- Who are the key players in this industry? 3- Why are the semiconductors have such high
demand nowadays? 4- Why can’t the supply fulfill the demand? 5- Why the semiconductor technology causes a
geopolitical challenge? 6- Who is the expected newcomer to the industry?
References
- The Semiconductor Industry Association (SIA) advances policies that help the industry grow and unites
semiconductor companies around common challenge.
[Link]
- Nasdaq is a global electronic marketplace for buying and selling securities, and it is the world's first and oldest
all-electronic stock exchange.
[Link]
- Trend Force is a global market research and consulting firm that specializes in the technology industry,
particularly semiconductors.
[Link]
[Link]
- KPMG is a global professional services network, accounting and advisory firm.
- [Link]
- Digital News Hub: It provides more than just standard business news and tools for investors and professionals,
including in-depth stock market charts.
[Link]
warns-4259347/
- TSMC created the semiconductor Dedicated IC Foundry business model when it was founded in 1987. In 2025,
TSMC served 534 customers and manufactured 12,682 products for various applications covering a variety of
end markets including high performance computing, smartphones, the Internet of Things (IoT), automotive, and
digital consumer electronics.
[Link]
- The Center for Strategic and International Studies (CSIS) is a bipartisan, nonprofit policy research organization
dedicated to advancing practical ideas to address the world’s greatest challenges
[Link]
- Reuters is a digital platform and one of the world's largest and most trusted international news agencies.
[Link]
2023-03-08/
1
Arab Academy for Science, Technology and Maritime Transport
Graduate School of Business
Master of Business Administration (MBA)
Marketing Research
- Rapidus Corporation was established in August 2022 to create advanced semiconductors and packaging
technologies. Our mission is to improve efficiency, reduce power and improve the ecological impact of advanced
computing in datacenters, autonomous vehicles, industrial manufacturing and artificial intelligence.
[Link]
[Link]
What are the uses of semiconductors in our daily life?
Article One
Behind virtually every innovation of the 21st century, semiconductors are hard at work. From the instant your finger
touches a smartphone screen and AI analyzing massive datasets behind the scenes, to an electric vehicle gliding silently
into motion—semiconductors are indispensable. In recent years, semiconductor technology has moved beyond merely
boosting computing performance to a stage where it expands human potential. The evolution of these small chips will
profoundly transform next-generation cities, healthcare, mobility and space exploration. Semiconductors have become
the foundational infrastructure of modern life. Smartphones integrate billions of transistors, powering the apps we use
every day. In cars, semiconductors are embedded in engine control, driver-assistance systems and the motor drives at the
heart of electrification—so much so that cars are now rightly called moving electronic devices. Cloud-computing and
data centers also rely entirely on semiconductors. Server-class CPUs, GPUs and memory underpin modern digital
services, enabling AI model training and fast search. At home, refrigerators, washing machines and air conditioners are
all made more efficient through semiconductor-based control.
(Independent Variable) (Dependent Variable)
Technology Evolution (Moderating Variable) Expanding Human Potential
Semiconductors Evolution
What is the history of its development?
Article Two
Before the invention of transistors, electronic devices used vacuum tubes, which powered radio, radar, telephones, and
early computers. That said, these precursor technologies had significant disadvantages, which limited their widespread
adoption. The semiconductor industry was born in 1947, when William Shockley, John Bardeen, and Walter Brattain
invented the first transistor. This technology made vacuum tube near obsolete and allowed for electronic devices to
become significantly smaller. Texas Instruments’ Jack Kilby and Fairchild Semiconductor’s Robert Noyce independently
developed the first integrated circuits in 1958 and 1959. Their innovation enabled the fabrication of multiple transistors
on a single microchip. Integrated circuits would further shrink electronic devices and enable an ever-greater number of
transistors and thereby increase compute power. Intel released the world’s first commercial microprocessor in 1971,
which integrated thousands of transistors into a single chip. The innovation was that a single chip could carry out the
function of a larger compute cluster. The microprocessor created the personal computer revolution whereby average
individuals and businesses could afford to purchase their own computers. System-on-chip components allowed devices
to become significantly smaller by reducing the number of other discrete components needed. The latest major shift in
semiconductor technology is creating a compute paradigm shift away from ultra-low latency serial to higher latency
2
Arab Academy for Science, Technology and Maritime Transport
Graduate School of Business
Master of Business Administration (MBA)
Marketing Research
parallel processing. In short, traditional central processing units (CPUs) were inefficient at conducting parallel
computation. This spurred the development of purpose-built silicon devices designed for specific tasks.
(Independent Variable) (Dependent Variable)
Semiconductors Evolution Devices became Significantly Smaller
Who are the key players in this industry? (Manufacturing Machines)
Article Three
ASML, the world's largest producer of lithography systems, is considered the biggest company in the semiconductor
market. That's why the Dutch tech giant's stock price nearly tripled over the past five years as the chipmaking market
expanded. ASML's lithography systems are used to optically laser etch circuit patterns onto silicon wafers. All the
world's top foundries including Taiwan Semiconductor Manufacturing (TSMC), Samsung, and Intel use its systems
to manufacture their chips. ASML's deep ultraviolet (DUV) lithography systems are used to manufacture older and larger
chips. It controls 90% of the DUV market, according to Valuates Report, while its two closest competitors
Canon and Nikon each hold slim 5% shares. These legacy systems cost $5 million to $90 million each.
ASML is also the only producer of extreme ultraviolet (EUV) systems, which are used to manufacture the world's
smallest, densest, and most power-efficient chips. Its older "low-NA" EUV systems cost about $220 million, while its
newest "high-NA" systems cost more than $400 million.
(Independent Variable) (Dependent Variable)
ASML the Largest Producer of Lithography systems Control of 90% of the Market (DUV Lithography system)
Control of 100% of the Market (EUV Lithography system)
Who are the key players in this industry? (Manufacturing Fabs)
Article Four
According to Trend Force, the global foundry market reached a record $41.7 billion in Q2 2025. Taiwan Semiconductor
Manufacturing Company (TSMC) not only leads but has significantly widened the gap between its competitors. As of
the most recent data from the second quarter of 2025, the company's market share has reached a record high of 70.2% in
the market share. The closest competitor is Samsung (South Korea) with market share 7.3% despite aggressive
investment in GAA tech. The "Secret Weapon": Advanced Technology Dominance (7nm chips and below), TSMC offers
the smallest transistors, highest performance, and best power efficiency. Nearly 75% of TSMC's revenue comes from
these advanced nodes, meaning their customers are almost exclusively buying high-end chips.
(Independent Variable) (Dependent Variable)
Advanced Technology Dominance for TSMC Control of 70.2% of the Market Share
3
Arab Academy for Science, Technology and Maritime Transport
Graduate School of Business
Master of Business Administration (MBA)
Marketing Research
Who are the key players in this industry? (Chip Designers)
Article Five
According to Trend Force, NVIDIA leads the market as a designing company with a record of $205,723 million in Q4
2025 with overall market share of 57%. Broadcom, Qualcomm, and AMD hold 11%, 11% and 10% in the overall market
share, respectively. NVIDIA leads the semiconductor design market because it executed a strategic pivot from PC
graphics to create an all-encompassing, full-stack hardware and software platform for accelerated computing, a move
that placed it at the center of the current AI revolution. By early 2024, NVIDIA held an estimated 86% market share in
the AI data center space, and by 2025, it controlled approximately 87% to 90% of all AI accelerator chips. This
dominance is so pronounced that the company's revenue growth has far outpaced the industry average.
(Independent Variable) (Dependent Variable)
Strategic Vision for NVIDIA Control of 70.2% of the Overall Market Share
Control of 90% of the AI Accelerator Chips Market Share
Why are the semiconductors have such high demand nowadays?
Article Six
The Primary Catalyst for the high demand of the semiconductors is the evolution and advancement of the Artificial
Intelligence (AI) and the backbone of AI is immense computational power, found in specialized semiconductors like
GPUs (Graphics Processing Units) and high-bandwidth memory (HBM). The AI boom triggered a 44% year-on-year
growth in the data-center semiconductor market in early 2025, driving 73% of industry leaders to cite AI as the top
revenue driver for their companies. Also, the Data Center Build-Out for big companies like (Amazon, Google,
Microsoft, etc.) rapidly expanding data centers globally, which made data centers the second-largest application
driving semiconductor revenue (61%). This includes general-purpose servers, networking gear, and the specialized
infrastructure needed for AI workloads.
(Independent Variable) (Dependent Variable)
Evolution and Advancement of the (AI) Spike for the Demand of Semiconductors
Data Center Build-Out
Why can’t the supply fulfill the demand?
Article Seven
Semiconductor supply can't meet demand because the industry's production capacity—already limited by extreme
technological and financial barriers—has been overwhelmed by an explosion in demand, particularly from AI, creating a
multi-layered supply shock. Some of the main reasons behind the scenes are that building a new leading-edge fab
requires a staggering $20 to $40+ billion investment could take from 3-5 years. Advanced chipmaking relies entirely
on Extreme Ultraviolet (EUV) lithography machines, made exclusively by the Dutch company ASML which could cost
over $350 million. The industry needs over one million additional skilled workers globally by 2030 to staff new fabs,
with a shortage of engineers and technicians worldwide. Geopolitical Risks also slow down the expansion of the industry
in China.
(Independent Variable) (Dependent Variable)
Cost & Time for New Fabs/ Dutch Company ASML Supply can’t Fulfill the Demand of Semiconductors
Skilled Workers/Geopolitical Risks
4
Arab Academy for Science, Technology and Maritime Transport
Graduate School of Business
Master of Business Administration (MBA)
Marketing Research
Why the semiconductor technology causes a geopolitical challenge?
Article Eight
The dual use of semiconductor technology in civil and military fields. All major U.S. defense systems and platforms rely
on semiconductors for their performance. Moreover, the U.S. civilian economy is deeply dependent on semiconductor-
based platforms for its daily operations. Ensuring U.S. leadership in semiconductor technology and securing the integrity
of the value chains that design, manufacture, package, and distribute these chips are perhaps the preeminent economic
and national security concerns of the modern era. To ensure it superiority, the USA government hobbled China's
chipmaking industry and slow both its military and civilian technology advance. According to (Reuters), the Netherlands'
government on (2019 & 2023) said it applied restrictions on ASML exports of semiconductor technology to protect
national security, joining the U.S. effort to curb chip exports to China. The announcement marked a concrete move by
the Dutch, who oversee essential chipmaking technology, toward adopting rules urged by Washington.
(Independent Variable) (Dependent Variable)
Ensuring U.S. leadership in semiconductor technology (Moderating Variable) Restrictions on ASML exports of Semiconductor Technology to China
Netherlands' government
Why the semiconductor technology causes a geopolitical challenge?
Article Nine
TSMC is the world’s heart for advanced semiconductor manufacturing, producing over 90% of the highest-end chips. Its
concentration in Taiwan makes it acutely vulnerable to geopolitics, especially the unresolved issue between China and
Taiwan. China has repeatedly conducted large-scale military exercises around Taiwan, including simulated blockade and
amphibious landing drills. A conflict, even a limited one, could shut down TSMC’s fabs in Hsinchu, Taichung, and
Tainan – the heart of global chip supply.
(Independent Variable) (Dependent Variable)
Conflict Between China & Taiwan Geopolitical Risks on semiconductor Industry
Who is the expected newcomer to the industry?
Article Ten
Rapidus Corporation was established in Japan in 2022 to create advanced semiconductor and packaging technologies.
The primary driver was Japan's urgent need for "economic security." The massive disruptions of the global chip shortage
caused the danger of relying on a fragile supply chain. The Japanese government views Rapidus as the last line of
defense for economic security, making technological independence in fields like AI and robotics critical for national
security. The Japanese government has committed over $16 billion in subsidies to support it. This is complemented by a
consortium of Japan's largest corporations, including Toyota, Sony, NTT, SoftBank, NEC, Denso, Kioxia, and MUFG
Bank, who came together to invest.
(Independent Variable) (Dependent Variable)
Economic Security for Japan (Moderating Variable) Establishing Rapidus Corporation
Japan Government/Japanese Largest Corporations