Investment in Substrate - Silicon Valley investors, including Founders Fund, General Catalyst, and Valor Equity Partners, have invested over $100 million in Substrate, a San Francisco chip startup founded in 2022, aiming to disrupt TSMC and ASML in advanced chipmaking [1][2] - Substrate's innovative approach involves using particle accelerators as light sources for X-ray-based lithography [2] Cost Reduction and Production Goals - Substrate claims its technology could reduce the cost of producing cutting-edge wafers from $100,000 to approximately $10,000 by the end of the decade, with commercial production targeted for 2028 [3] Competitive Landscape - CEO James Proud plans to create alternatives to ASML's extreme ultraviolet lithography systems and TSMC's fabrication plants, which may require substantial funding in the tens or hundreds of billions as Substrate scales operations [4] AI's Impact on Chip Industry - ASML's stock has increased by 52% year-to-date, driven by strong demand for advanced chipmaking equipment from the AI sector [5] - The chip industry is experiencing a shift towards more advanced manufacturing nodes, with AI becoming the primary growth driver, surpassing smartphones [6] TSMC's Market Position - TSMC's stock has gained 53% year-to-date, maintaining its manufacturing dominance, with even Intel outsourcing production of critical AI-related processors to TSMC [7] - TSMC is aggressively investing to meet the rising AI demand, increasing its capital expenditure to between $40 billion and $42 billion for the year, while collaborating closely with major customers like Google, Amazon, and Microsoft to manage demand effectively [8]