# The fab industry may need to rethink its basic assumptions

Markdown copy of https://realalpha.app/s/the-fab-industry-may-need-to-rethink-its-basic-assumptions/ on Real Alpha, the best minutes from long interviews with the people building AI. Cite and link the page, not this copy.

- Speaker: [Pushkar Arande](https://realalpha.app/people/pushkar-arande/)
- Host: [Dwarkesh Patel](https://realalpha.app/people/dwarkesh-patel/) · Host, Dwarkesh Podcast · Co-wrote The Scaling Era, an oral history of AI; named to TIME100 AI.
- Show: Dwarkesh Podcast
- Episode: [What will computer chips look like in 2045?](https://realalpha.app/v/frYSOKvNiiE/), Oct 22, 2026
- Moment: 1:02:43 to 1:07:43 of the episode (5 min), playing on https://realalpha.app/s/the-fab-industry-may-need-to-rethink-its-basic-assumptions/; the episode from there: https://realalpha.app/v/frYSOKvNiiE/?t=3763

## Quote

> “You put in like **tens of billions of dollars** and you really don't want to take any risks.”
> — [Pushkar Arande](https://realalpha.app/people/pushkar-arande/) at [1:04:16](https://realalpha.app/v/frYSOKvNiiE/?t=3856) · Dwarkesh Podcast

## Takeaways

1. Fab construction costs have roughly doubled every four to five years.
2. Incumbents avoid experiments that could disrupt expensive production.
3. A clean-slate approach could challenge long-standing fab practices.

## About this segment

Intel’s CTO says fab costs keep rising, but risk aversion makes incumbents reluctant to question established practices. He argues that clean-room requirements and even chip-design conventions deserve a fresh look.

From “What will computer chips look like in 2045?”, Oct 22, 2026. [Watch the full episode](https://realalpha.app/v/frYSOKvNiiE/)

## Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

[1:02:46](https://realalpha.app/v/frYSOKvNiiE/?t=3766) So if you think of a foundry like Intel, which has to build these expensive facilities, buy expensive tools, I wonder what you think the economics of that fundamentally could look like, whether it could get more economical, whether it could scale faster. Like I described earlier, this is an extremely capital-heavy business. and if you look at the if you just plot the you know how much does it cost to build a fab and if you just over the last I don't know 20 30 40 years I think it's like doubling every four to five years even inside the fab if you look at the cost to do lithography which is the most expensive module just patterning that itself is doubling like more than that at more than that rate right So like today, a high NA UV scanner costs like, and all its associated equipment, it's like $400 million, right?

[1:03:40](https://realalpha.app/v/frYSOKvNiiE/?t=3820) And so what does that mean? If that rate were to continue, if you could, if you just look, draw the line and say, okay, does that mean like four years from now, like cost of patterning is going to be like $800 billion, right? Doesn't, you know, $800 million, it doesn't really make sense, right? I think that a very interesting thought exercise do is to say, you know, are there things that could be just very radically different that we could do today that we perhaps couldn't do 20 years ago? This is a very risk-averse industry for very good reason, for exactly that reason, right? You put in like tens of billions of dollars and you really don't want to take any risks. So you want to keep doing things the way they've been done for literally decades and this is not just true of semiconductors but like

[1:04:31](https://realalpha.app/v/frYSOKvNiiE/?t=3871) everything really um but if you've just kept on doing that for decade upon decade many things just become like you know you just become indoctrinated right and i mean there are engineers who probably work at intel who are new who just you know come in and they're taught this is how the fab this is the process flow and they just take that as gospel right that that's just how it is done. But is that really the best way to build a chip today? It's a really valid question. I'm very curious what you're hinting at, because it could be anything from, you know, we can figure out ways in which you use fewer lithopasses and economize on this expensive component to like, maybe we need to rethink the transistor. What is the level of? I think all of the above. Transistor architecture and, you know, evolving, you know, just a silicon transistor has

[1:05:27](https://realalpha.app/v/frYSOKvNiiE/?t=3927) continued to evolve over 30, 40 years. And that will continue. So, right, you've seen the evolution from like the planar transistor to FinFETs to now gate all around transistors. There'll be more, like that roadmap is pretty, you know, it exists and it's pretty well defined. A lot of people working on it. But there's things like, do you really need a clean room today? Do you need the infrastructure to be as sophisticated, as complex as it is today?

[1:06:01](https://realalpha.app/v/frYSOKvNiiE/?t=3961) Surely one can run an experiment where people are eating hamburgers and smoking cigars in the research lab and see what happens to yield. That would be a great experiment to run, But, you know, no incumbent like, you know, Intel or TSMC or Samsung, I mean, nobody would want to just willingly do that. So that's what I meant really by this, you know, it's a very risk averse business for good reason.

[1:06:29](https://realalpha.app/v/frYSOKvNiiE/?t=3989) You know, every one day lost in productivity is like, I don't know how many dollars, right? But you save so much money and not having to build clean rooms in the future. But, you know, it's really the risk of the fear of the unknown, right? So nobody is going to willingly take that risk. But that's why I think, you know, sometimes it's good to sort of just start with a clean slate and rethink everything.

[1:06:52](https://realalpha.app/v/frYSOKvNiiE/?t=4012) And it's like, okay, these things, you know, same thing applies to, like, you know, chip design, by the way, right? Many of the ways we do CPU design were probably locked in, like, you know, 30 years ago. Does that mean it's smart to still do it the same way? Probably not, right? But this is a very complex problem. You know, chip design is like easy to, it's fairly low, you know, I guess the capacity to take risk is maybe higher, this one less so.

[1:07:29](https://realalpha.app/v/frYSOKvNiiE/?t=4049) But given where the economics is today, I think it's a very valid question to ask, you know, like maybe there's a smarter way to do this. So to close out, maybe we'll start off at the same question we began the interview with. Yes.