Intel Vs. TSMC: Process Technology Leadership Is More Than Transistor Density (NASDAQ:INTC)

Investment Thesis

Much of TSMC’s (NYSE:TSM) growth comes from advanced process technology nodes, which serve to follow Moore’s Law: they deliver up to a 2x improvement in transistor density per generation, every two to three years. This provides chip designers with a larger transistor budget, of more powerful and more efficient transistors, which allows them to increase functionality. Furthermore, cost per transistor also tends to come down.

For Intel (INTC), likewise, reaping the benefits of Moore’s Law has been and continues to be vital for being able to compete with its product offerings and expand to new markets such as IoT, GPUs, and AI.

Given that Moore’s Law is an exponential trend, even being ahead by just one step could deliver a tremendous competitive advantage. For example, for gamers, a 2x better GPU could mean achieving 60fps instead of 30fps.

In a past article, I explored the future of

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