AI Investing Glossary
What is a semiconductor foundry?
A foundry is a company that manufactures chips designed by others. Most AI chip designers own no factories; they send designs to foundries whose leading-edge fabrication plants are among the most complex and expensive facilities ever built. Advanced AI chips can currently be made at scale by only a small number of foundries.
Why it matters for AI investors
Foundries are paid for capacity rather than any single product's success, so competition among AI chip designers raises their demand instead of threatening it. Their capacity bookings and advanced-packaging expansion are leading indicators for the whole compute layer.
Tracked stocks in this layer
The largest names in the Chip Equipment & Foundries category, ranked by market cap:
Market data as of the close on . Prices are end of day, not live.
Related reading
- What are AI infrastructure stocks? The 12 layers, explained · AI infrastructure stocks are the companies paid to build AI compute: chips, memory, networking, data centers, cooling and power. The 12 layers and the catch.
Frequently asked questions
Why can so few foundries make AI chips?
Leading-edge fabrication requires extreme-ultraviolet lithography machines, years of process development, and tens of billions of dollars per fab, and yield at the newest process nodes is hard-won expertise. That combination has narrowed the leading edge to a handful of players, with one foundry manufacturing the large majority of advanced AI processors today.
Related terms
See how this fits the whole picture in the Start Here guide, or browse the full glossary.