The technology company Meta Platforms – owner of Facebook, Instagram, WhatsApp and more – will start production of its own artificial intelligence microchip, called Iris, from September. According to Reuters, which broke the news, the testing phase of the device was completed in just six weeks, without highlighting any significant issues.
META’S PARTNERS: BROADCOM AND TSMC
For the chip design, Meta collaborated with the American company Broadcom; it will rely on the Taiwanese company Tsmc – the largest contract chip manufacturer in the world – for manufacturing.
META WANTS MORE SELF-SUFFICIENCY ON MICROCHIPS
The internal development of the microchip likely required very high investments from Meta, but in the long term it should allow it to reduce costs related to the computing power needed for the operation and advancement of its artificial intelligence systems.
The chip will not replace Nvidia or Amd processors, however, but will complement them and help Meta limit its dependence on foreign suppliers. In this regard, the company says it wants to release a new microchip every six months starting from 2027: this is an even shorter timeframe than that of chipmakers, who usually market a new “technology generation” once a year.
PLANS FOR COMPUTING POWER
Meta also expects to have 7 gigawatts of computing capacity by the end of 2026, then reaching 14 GW in 2027. This year, it will spend 145 billion dollars on artificial intelligence infrastructure; collectively, American Big Tech companies are expected to invest over 700 billion in this field.
Despite the intentions of self-sufficiency, Meta has continued to secure long-term supply contracts with other companies: for example, it will purchase memory chips from Samsung, flash storage from Sandisk, and fiber optic components from Sumitomo.
THE RISK OF CHIPFLATION
The “race for artificial intelligence” – involving all major technology companies, not just Meta – has caused a surge in demand for specialized microchips, such as graphics processing units and memory chips: since supply struggles to keep up, prices of these components are rising sharply and there is concern about chipflation, the inflation of microchips. Chipflation is not only a problem for the technology sector but for the entire global economy, since chips are practically everywhere, from cars to household appliances.
– For further reading: The chip crisis brings Sk Hynix and Micron into the “1000 billion dollar club”
TSMC SALES ARE BOOMING, BUT THERE IS A SUPPLY PROBLEM
Although it is struggling to keep up with all orders, it cannot be said that chipflation is a problem for the aforementioned Taiwanese company Tsmc, undisputed leader in the semiconductor manufacturing segment and main supplier to Nvidia and Apple, among others. Doing without Tsmc is extremely difficult, as there are currently no companies capable of guaranteeing its same levels of technological quality and production scale.
According to forecasts by Bloomberg, in the second quarter of 2026 Tsmc’s sales grew by 36 percent and revenues reached 39.6 billion dollars. The company said it will allocate 56 billion, a record figure, to capital expenditures this year. But it also announced that despite expanding its manufacturing capacity, it will not be able to meet all demand from American customers for years.
THE SITUATION OF SK HYNIX
The South Korean company Sk Hynix, the largest producer of memory chips in the world, also said it expects the shortage of these devices to continue beyond 2030. The company recently went public in the United States – with great success: it raised 26.5 billion dollars – but today its shares on the Seoul stock exchange have plummeted by 13 percent, dragging down the Kospi index, which lost over 8 percent.
Sk Hynix has greatly benefited from the growth in demand – and prices – for memory chips, highly sought after by the artificial intelligence industry, so much so that its South Korean shares have grown more than twenty-five times since the end of 2022. The recent decline is said to be due to profit-taking by investors after the Nasdaq listing.
