Chip Manufacturers (Foundries & IDMs)

Actor Type: Producer Breaks When: Demand collapse; overcapacity; geopolitics Capital Intensity: Extreme Cash Flow Stability: Boom/bust cyclical Economic Nature: Asset ownership Margin Driver: Utilization, node leadership Performs Best When: Full fab utilization Pricing Power: Moderate Primary Function: Fabricate wafers and chips Primary Risk Transfer Mechanism: Limited prepaid capacity agreements Primary Risks Held: Obsolescence; demand volatility; geopolitics Public / Private Mix: Mostly public Representative Firms: TSMC; Samsung; Intel; GlobalFoundries; SMIC Residual Risk After Transfer: High Revenue Model: Wafer / chip sales Typical Margin Profile: Highly variable Value Chain Segment: Upstream Who Ultimately Bears the Risk?: Shareholders