The semiconductor industry's relentless pursuit of miniaturization is approaching a pivotal milestone: the 1-nanometer (nm) process node. This advancement transcends technical achievement; it embodies strategic intent, signaling which entities will lead in the era of ultra-dense computing. For semiconductor manufacturers and Electronic Design Automation (EDA) executives, the 1nm frontier is a proving ground for innovation and collaboration. For institutional investors, it represents a litmus test for identifying companies poised to dominate the next decade of technological evolution.

The 1nm Frontier: Where Physics Meets Power

The transition to the 1nm process node is not merely a continuation of Moore's Law; it signifies a critical juncture where physical limitations, economic considerations, and geopolitical factors converge. Achieving this level of miniaturization presents unprecedented challenges, including quantum tunneling effects and escalating fabrication costs.

Moreover, the geopolitical landscape adds complexity, as nations recognize semiconductor supremacy as integral to technological sovereignty. The US and China, for instance, are intensifying efforts to bolster domestic semiconductor capabilities, reflecting the strategic importance of leading-edge chip production. (Collateral Damage: The Domestic Impact of US Semiconductor Export Controls)

Breaking the Barrier: The Toolkit for 1nm

To achieve the 1nm node, the industry must deploy a completely new generation of tools, materials, and process innovations. Each represents a foundational shift from earlier node transitions, and none are optional. These are not evolutionary steps — they are radical enablers.

• High-NA EUV Lithography: ASML's High Numerical Aperture Extreme Ultraviolet (High-NA EUV) systems are pivotal for achieving the resolution required at the 1nm scale. These machines offer up to 60% better resolution than their predecessors, enabling the printing of finer features essential for next-generation chips. (ASML and IMEC Open High-NA EUV Lab)

• Materials Innovation: Transitioning beyond traditional silicon, materials like graphene and molybdenum disulfide (MoS₂) are being explored to overcome physical limits. Unlike graphene, MoS₂ has a band gap, making it more suitable for logic transistors. (MoS₂ as a Graphene Competitor)

• Advanced Packaging: 3D stacking and chiplet integration are no longer optional — they are essential. These packaging technologies mitigate interconnect bottlenecks and thermal issues that arise at extreme scales. (Revolutionizing Sub-3nm Design)

The Contenders: Who’s Betting Big on 1nm?

Not every company has the resources — or the conviction — to chase 1nm. But among those that do, timelines are converging and capital is flowing at historic levels. Here’s how the three primary contenders are positioning for leadership.

TSMC

Taiwan Semiconductor Manufacturing Company plans to begin 1nm production around 2030 at its "Fab 25" in southern Taiwan. This facility will feature six production lines for 12-inch wafers and serve as a cornerstone of TSMC's continued leadership. (TSMC to Launch Much-Anticipated 1nm Process Before Samsung Electronics, Intel)

Intel

Intel has targeted 2027 for mass production of its 10A (1nm) process as part of its IDM 2.0 strategy. The company is also investing in fully AI-automated fabs, using "cobots" to enhance throughput and precision. (Intel puts 1nm process (10A) on the roadmap for 2027)

Samsung

Samsung Electronics has accelerated its roadmap, now aiming for mass production of 1nm-class chips in 2026. The company is leveraging gate-all-around FETs and aggressive scaling as part of its effort to outpace rivals. (Samsung Is Moving 1nm Production Up One Year to 2026)

EDA at a Crossroads: Tools for an Atomic Era

Semiconductor design at 1nm redefines the role of the toolchain. Traditional EDA is no longer sufficient — instead, we’re entering a new era where multiphysics, AI, and foundry-collaborative workflows are becoming inseparable. The stakes for tool vendors have never been higher.

• Design Complexity: At 1nm, quantum effects like leakage and tunneling can no longer be treated as edge cases. EDA tools must simulate these behaviors accurately and provide guardrails for designers. (Quantum Effects At 7/5nm And Beyond)

• AI-Augmented Design: AI and machine learning are now integrated into every layer of design, from layout synthesis to verification. Tools that use LLMs to accelerate RTL validation and power optimization are already in early deployment.

• Foundry Co-Development: Foundries and EDA vendors must work hand-in-hand. This includes creating validated PDKs (process design kits) and collaborative toolchains that reduce time-to-tapeout for hyperscalers designing custom AI chips.

Capital, Control, and Consequence: What Investors Need to Know

At 1nm, capital becomes both an enabler and a barrier. Only the best-capitalized firms will survive — and that’s precisely why investors must watch where the money, partnerships, and geopolitical alignment are flowing.

• CapEx and ROI: ASML’s high-NA EUV machines cost nearly €350 million each. TSMC, Intel, and Samsung are expected to spend tens of billions annually just to remain competitive. (ASML, IMEC to test newest chip-making tool)

• Strategic Partnerships: Intel’s early purchase of ASML’s high-NA tools and close collaboration with Cadence and Synopsys shows that surviving at 1nm is a networked endeavor. (ASML Stock Jumps As Major Customer Agrees To Buy Its Pricey Chip Gear)

• Geopolitical Exposure: The globalization of semiconductor manufacturing — and its gradual fragmentation — means supply chain security is now part of investment risk profiles.

Geopolitics and National Agendas: Chips as Chess Pieces

The semiconductor race has become a geopolitical chessboard. The US CHIPS Act is injecting over $50 billion into domestic production, with $39 billion earmarked for manufacturing incentives. Intel’s fabs in Ohio and TSMC’s Arizona footprint are direct beneficiaries.

The EU and Japan are similarly incentivizing onshore manufacturing, with Europe’s Chips Act and Japan’s $6.3 billion package for next-gen fabs. These moves are as much about national security as they are about economics.

Meanwhile, China is responding to export bans and licensing restrictions by accelerating domestic innovation. The government is investing aggressively in SMIC and alternative EDA platforms, and promoting self-reliance across the stack.

1nm, in this context, is not just a technical feat. It is a wedge in global technology policy — a threshold that may determine which countries hold compute power, and which must rent it.

EDA’s Moment of Truth: From Tool Provider to Strategic Partner

In the sub-2nm era, the role of EDA vendors has become mission-critical. Companies like Synopsys and Cadence are no longer just software providers — they are embedded in the foundry roadmap and design cycles of every hyperscaler, fabless company, and national initiative.

EDA firms must now support everything from back-end chiplet integration to power-aware AI model optimization. The market is demanding solutions that blend physical verification, simulation, and even cross-discipline optimization (including optics, RF, and thermal domains).

As such, the valuation of EDA firms should increasingly reflect not only their revenue growth but also their strategic embeddedness in the industry’s most capital-intensive, defensible layers.

Bottomline: Is 1nm a Mirage?

The move to 1nm is being framed as the next logical step in chip evolution — but it may also mark a limit. For the few who succeed, it offers strategic dominance. But for the rest of the industry, the high cost, extreme complexity, and geopolitical risk of 1nm may accelerate an industry-wide pivot toward architectural innovation, software-defined hardware, and post-silicon computing.

The future of compute is certainly written in silicon — and 1nm is the line in the sand (pun intended). And whoever crosses it first won’t just build the smallest transistor. They’ll shape the biggest outcomes.