What do semiconductors and Saudi Arabia have in common?

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This week we’re quoting…

Yasmin Khowaiter (founder and host of The Majlis Podcast)

What Khowaiter said: 

“One myth to debunk is that Saudi Arabia did not appear on the global map overnight… Our previous leaders have laid the groundwork for the change happening today.” 

From Saudi Arabia to semiconductors 

Khowaiter was talking about Saudi Arabia, and its place in global markets. But today, we want to talk about semiconductors. 

See, the general, non-tech public is just beginning to acknowledge how important semiconductors are. This is partly because semiconductors only make headlines when something goes wrong; a shortage, a geopolitical flashpoint, a missed product cycle. 

But when you’re someone who knows that semiconductors decide what we can and can’t do in tech (and we know you know), it’s clear that developers started writing their story a long time ago. 

So let’s give semiconductors a bit of attention today. Because while they’re now enabling cutting-edge tech, technologists have been laying the groundwork for that for years. 

From curiosity to the cornerstone of tech 

If you thought semiconductors were born out of grand visions of a digital future, we’re here to bring you back to reality. Because they actually emerged from a very practical problem. 

In the early 20th century, physicists noticed that certain materials behaved in strange, useful ways – sometimes conducting electricity, sometimes resisting it. And in 1947, that curiosity led to the transistor, developed at Bell Labs as a smaller, more reliable alternative to bulky vacuum tubes. 

What followed was a manufacturing breakthrough. The transistor made it possible to shrink, replicate, and scale computing power – again and again. 

As decades passed, this relentless miniaturisation turned semiconductors into the infrastructure of modern life. And that brings us to today – with almost every digital interaction tracing back to a chip somewhere. 

The market today: vast, concentrated, strategic

The scale of the semiconductor market now reflects that central role. Global revenues reached around USD $772 billion in 2025, a year-on-year increase of 22.5%, driven largely by demand for logic and memory chips powering AI, data centres, and advanced computing.

Industry forecasters expect continued strong growth into 2026, with the market edging closer to the $1 trillion mark if current momentum holds. 

But scale tells only part of the story.

Production and capability are highly concentrated. Advanced manufacturing is dominated by a small number of players and regions, turning semiconductors into strategic assets – instead of just components, they’re now critical infrastructure. 

The challenges – in numbers

• It takes tens of billions of dollars to build and equip a single leading-edge fabrication plant, which locks companies into long investment cycles.
• The most advanced chips are produced by a very small number of fabs globally, which creates both supply-chain and geopolitical risk.
• Global semiconductor equipment sales are forecast to reach $139 billion in 2026, with progress highly dependent on specialised tooling.
• As transistors approach ever-smaller scales, physics itself is a core challenge – issues like heat, leakage, and quantum effects make further shrinkage slower, harder, and more expensive.

And these aren’t problems that can be solved with a single breakthrough.

Who is trying to solve them? 

Different companies are tackling different parts of the problem – and often with very different strategies.

At the manufacturing end, TSMC continues to push the limits of advanced production at scale, while Intel is investing heavily to rebuild manufacturing capability across multiple regions.

In equipment, ASML occupies a unique position. Its extreme ultraviolet lithography machines are essential for leading-edge chipmaking – and extraordinarily difficult to replicate.

On the design side, companies including NVIDIA and Arm are focusing less on general-purpose performance and more on specialised architectures tuned for specific workloads, particularly AI.

Alongside these giants, the industry is experimenting with new approaches: chiplets, advanced packaging, and heterogeneous designs that prioritise efficiency and flexibility over raw clock speed. 

So what’s next in the semiconductor story? 

The next phase of semiconductor evolution is unlikely to be defined by a single, dramatic leap.

Instead, progress looks more incremental – and more strategic. As noted by McKinsey, rather than simply making chips smaller and faster, the industry is shifting toward making them more appropriate: specialised for particular tasks, more energy-efficient, and more resilient to disruption.

Semiconductors have always advanced under constraint – whether physical, economic, or political. As those constraints tighten, they force progress to change shape; but progress will continue nonetheless. 

Speaking about Saudi Arabia (not semiconductors), Khowaiter added:

“There also has to be an understanding that we are moving fast and adjusting as we go. It's significant, and I am thankful, that we do not have a government that doubles down on an idea if it becomes clear that there are other, better avenues to explore. To the untrained eye it may look like a misstep, but the ability to pivot is what will make the Kingdom successful.” 

And we think this applies to the evolution of semiconductors too. The future of this tech will be characterised by adaptability and precision, to empower tech innovators around the world. 

Have an idea for a topic you'd like us to cover? We're eager to hear it. Drop us a message and share your thoughts.

Catch you next week,
The LEAP Team