Foundry

A foundry is a contract manufacturer that takes semiconductor designs from other companies and produces the actual chips. NVIDIA and Apple only design the chips; the physical fabrication is handled by foundries. Taiwan's TSMC dominates the market by a wide margin, with Samsung Electronics chasing behind.

This is the real bottleneck behind AI chip shortages — no matter how good a design is, cutting-edge manufacturing capacity is limited. That's why news stories about "the race to secure TSMC production lines" or "foundry yield rates" keep showing up alongside AI headlines, and it's also the starting point for discussions of semiconductor geopolitics, such as the Taiwan risk.