AI Research · Chips

The AI Chip Supply Chain

The entire AI revolution runs through a handful of irreplaceable companies. One makes the only machines that can print frontier chips. Another provides the only software that can design them. These aren't competitive advantages — they're physics-constrained monopolies.
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The Chokepoints
Monopolies that can't be replicated

There is exactly one company in the world that manufactures the extreme ultraviolet lithography machines required to fabricate the most advanced semiconductors. Those machines cost over $200 million each, take more than a year to build, and require 150,000 components. Every frontier AI chip from every manufacturer passes through those machines. There is no alternative supplier. There is no startup that will disrupt this position. The physics are too hard and the capital requirements too massive.

There is a small club of companies that provide the electronic design automation software — the tools that chip engineers use to architect semiconductors. The two leaders recently merged, creating a "silicon to systems" platform that is now embedded in the workflow of virtually every semiconductor company in the world. If you're designing an advanced chip, you're using their software.

We identified these chokepoints in the first months of the portfolio. The structural monopoly thesis — investing in companies whose competitive positions cannot be eroded because the barriers are physical, not just financial — has been a core principle since day one.

The Full Stack
From lithography to testing

The chip supply chain isn't one company. It's a vertical stack of chokepoints: the machines that fabricate chips, the software that designs them, the processors that power AI workloads, the architectures that license the instruction sets, and the testing equipment that validates every chip before it ships.

At each layer, the number of companies that matter is small — often two or three, sometimes one. And the demand signal hasn't weakened since we started building the portfolio: Taiwan Semi just reported a 20% jump in revenue month-over-month in a typically quiet month and greenlighted a $45 billion capex plan.

We hold positions across multiple layers of this stack. The specific companies, entry prices, and thesis for each — including one that we've doubled down on following a transformational merger — are available to members.

We've been invested across the AI chip supply chain since the portfolio's first month. Members get every position, every thesis, and every update as the semiconductor landscape evolves.

See the Chip Stack Positions →

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The chip supply chain is the foundation of the AI revolution. We hold positions across multiple layers — members get the full breakdown.

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