Earlier this week, China scuttled a $5.4 dollar merger between Intel and Tower Semiconductor. Tower does not manufacture advanced chips using the latest technologies. Instead, it builds legacy chips–chips manufactured using much older technologies.
Intel’s play for the legacy chip market was almost an oddity. Most of the recent high-profile U.S. chip-related efforts–the CHIPS and Science Act, export restrictions on China, and onshoring manufacturing–largely focused on advanced chips. However, most chips manufactured today are not advanced chips, but legacy chips. Two-thirds of the chips sold today are manufactured using technologies that were commercialized before 2005. Almost a quarter of the chips sold today are manufactured using technologies from the last century! In fact, a majority of the ~500 chip manufacturing plants operating today worldwide were built in the last century.
