Prohibitive fab costs

As chip factories ("fabs") get more expensive to build, fewer companies can afford them. In this Intel chart, the green band shows the companies that can afford to build a fab that makes chips out of 300mm silicon wafers. The orange band shows the much smaller number that can afford to build chips with a 2015 manufacturing process. (The chart is based on the companies' 2011 chip revenue and a profitability assumption of 40 to 50 percent gross margins.)