On 15 January 2026 TSMC reported that it kept 59.9% of its 2025 revenue as gross profit. Two weeks later, on 29 January 2026, STMicroelectronics, which makes chips in its own plants at Crolles, reported a gross margin of 33.9% for the same year.
In a chip, the money pools where a step cannot be copied quickly: lithography and leading-edge foundry keep more than half of each sale as gross profit, while an integrated maker like ST, with fabs of its own at Crolles, kept about a third in 2025, and that gap is a map of where scarce skills are paid.
This piece opens the CareerOn Industry Atlas on semiconductors. It reads eight documents that companies and one industry body published between January and June 2026, and it asks one question of them: at which step of making a chip does the money stay? It reads the whole market first, then six companies that each sell a different step, then the case against our reading, and it ends with what the map means for someone choosing where to build a career.
The size of the pie
World Semiconductor Trade Statistics, the industry body that collects sales from chip companies, published its spring forecast on 2 June 2026. Its table puts world chip sales in 2025 at USD 795,640 million, up 26.2% on the year before.
The same document is a forecast for what comes next, and it should be read as one. WSTS projects the market to reach USD 1.51 trillion in 2026, growth of 90 percent, driven overwhelmingly by memory, which it expects to grow by around 250 percent. A forecast is a projection by the people who collect the numbers. It is not a result, and nothing in this piece treats it as one.
What matters for our question is that a total, however large, says nothing about who keeps it. A market can grow by more than a quarter in a year while one company in the chain loses revenue and another doubles a business line. To see where the money stays, one has to open the chain and read each step on its own terms.
Six steps, six ways of being paid
A chip passes through many hands before it reaches a phone, a car or a data centre. Six of those hands are enough to see the pattern. Someone designs the architecture and licenses it. Someone sells the software every design must pass through. Someone builds the machines that print the circuit. Someone makes the engineered wafer the circuit is printed on. Someone runs the factory for customers who have no factory. And some companies do several of these things themselves, inside one group.
Six companies sell six different steps of the same chip
| Step | Company | Revenue, as published | Period |
|---|---|---|---|
| Design IP | Arm | USD 4.92 billion | year to 31 March 2026 |
| Design software | Cadence | USD 5.297 billion | 2025 |
| Equipment | ASML | EUR 32.7 billion | 2025 |
| Materials | Soitec (Bernin) | EUR 592m | year to 31 March 2026 |
| Foundry | TSMC | USD 122.42 billion | 2025 |
| Integrated maker | STMicroelectronics (Crolles) | USD 11.80 billion | 2025 |
Sources 2 Arm · 3 Cadence Design Systems · 4 ASML Holding N.V. · 5 Soitec · 6 U.S. Securities and Exchange Commission · 7 STMicroelectronics
The table deliberately does not add these figures up. Arm and Soitec close their year on 31 March 2026, the others on 31 December 2025. Some report in dollars, some in euros. Adding them would produce a number no company printed and no reader could check. Each line is the company's own revenue, in its own currency, for its own year.
Revenue is also the wrong measure for our question. A company can sell a great deal and keep little of it. The better question is what share of each sale stays with the company after the direct cost of making what it sold. That is gross margin, and three of the six companies print it on the same basis.
Where the margin sits
Lithography and leading-edge foundry keep more than half of each sale, ST keeps a third
- TSMC: 59.9% gross margin, 2025, as published
- ASML: 52.8% gross margin, 2025, as published
- STMicroelectronics: 33.9% gross margin, 2025, as published
gross margin, 2025, as published
Sources 4 ASML Holding N.V. · 6 U.S. Securities and Exchange Commission · 7 STMicroelectronics
TSMC, the contract manufacturer that makes chips for companies without their own factories, reported 2025 net revenue of USD 122.42 billion, up 35.9%, with a gross margin of 59.9% and an operating margin of 50.8%. Those are the figures of its fourth-quarter earnings presentation of 15 January 2026, filed with the US Securities and Exchange Commission.
ASML, which builds the lithography systems that print circuit patterns onto wafers, reported total net sales of EUR 32.7 billion for 2025 and a gross margin of 52.8%, in its results release of 28 January 2026. It closed the year with a backlog of EUR 38.8 billion.
STMicroelectronics reported FY25 net revenues of USD 11.80 billion and a gross margin of 33.9%, in its release of 29 January 2026. Its revenues fell 11.1% in the year.
The gap between the first two and the third is the centre of this piece. It is not a judgement of which company is better run. It is a reading of where, in 2025, each step of the chain was able to keep its money. Our reading, which the documents support but do not state, is that the foundry and the lithography maker sell something their customers cannot easily obtain elsewhere at the same level, while the integrated maker sells into markets, such as cars and industrial equipment, where buyers can choose between suppliers.
Three of our six companies are missing from that chart, and the omission is deliberate. Cadence prints an operating margin. Soitec prints an EBITDA margin. Arm's release, as we read it, gives revenue by type rather than a gross margin. Each of those measures leaves out a different set of costs. Putting them on the same axis as a gross margin would make a comparison that looks precise and is not.
ASML: paid again after the sale
A lithography system is not sold once and forgotten. ASML separates the sale of new machines from what it calls Installed Base Management, which it defines as "net service and field option sales": servicing, upgrading and extending machines already working in customers' factories. In 2025 that line brought in EUR 8,193 million of total net sales of EUR 32,667 million.
That line comes not from new machines but from the fleet already installed. For a reader thinking about work, it means that the value of this step is not only in the engineers who design the next machine. It is also in the engineers who install, qualify, maintain and upgrade the machines already standing in cleanrooms, including the ones in the Grenoble region.
Arm: paid twice for one design
Arm is paid twice for one design, once to license it and again on every chip shipped
- Royalty: USD 2.61 billion USD billion, year to 31 March 2026
- Licensing: USD 2.31 billion USD billion, year to 31 March 2026
USD billion, year to 31 March 2026
Source 2 Arm
Arm designs processor architectures and does not make chips itself. It is paid in two ways, and its results for the year to 31 March 2026 show both. Licensing revenue, paid when a customer takes up a design, was USD 2.31 billion. Royalty revenue, paid on chips that ship with the design inside, was USD 2.61 billion. Total revenue was USD 4.92 billion.
The structure is the lesson. A design, once licensed, keeps earning each time a chip that uses it is sold, for as long as that chip sells. Arm writes that its data center royalties more than doubled year over year. The skill behind this step is not only processor design. It is also the commercial and legal work of licensing: deciding what to license, to whom, on what terms, and how royalties are counted.
Cadence: the toll on every design
Before a chip is made, it is designed and checked in software. Cadence is one of the companies that sell that software. For 2025 it reported revenue of USD 5.297 billion, a GAAP operating margin of 28.2%, and a non-GAAP operating margin of 44.6%, in its results of 17 February 2026.
The two margins are worth reading together. GAAP is the accounting standard the company must follow. Non-GAAP is the company's own adjusted measure, which leaves out some costs. The distance between 28.2% and 44.6% is the cost the adjusted measure leaves out, which is why a careful reader quotes both.
Soitec: materials from Bernin
Soitec, based in Bernin near Grenoble, makes engineered wafers, the base on which some chips are built. Its year ended on 31 March 2026, and its results, published on 27 May 2026, describe a hard year. Revenue was EUR 592m, down 34% on a reported basis, which the company attributes to "ongoing customer inventory correction". Its EBITDA margin was 25.4%.
The same release names a growing business. Revenue from Photonics-SOI, wafers used for optical links, was above USD 100m in the year, which Soitec ties to AI data center demand. One product line growing inside a company whose total fell by 34% is a pattern worth watching. The step as a whole was paid less; one specialised part of it was paid more.
STMicroelectronics: the integrated maker
ST designs chips, makes many of them in its own plants, and its annual report for 2025 lists Crolles, France, among its manufacturing sites. It sells them into cars, industrial equipment, personal electronics and communications. That breadth is its strength and, in 2025, its exposure. FY25 revenues decreased 11.1% to USD 11.80 billion, and gross margin was 33.9%.
An integrated maker carries costs that a pure designer does not: it owns and runs factories, and it pays for them whether or not they are full. When demand falls, those costs stay. That is one reason an integrated maker's margin moves more with the cycle than a licensor's does.
Europe buys a small share
Europe’s chip purchases grew 6.7% in 2025 while the world market grew 26.2%
- Asia Pacific: 439,747 semiconductor sales by region, 2025, US$ million
- Americas: 256,476 semiconductor sales by region, 2025, US$ million
- Europe: 54,694 semiconductor sales by region, 2025, US$ million
- Japan: 44,723 semiconductor sales by region, 2025, US$ million
semiconductor sales by region, 2025, US$ million
Source 1 SEMI
The WSTS table also shows where chips are bought. In 2025, sales in Europe were USD 54,694 million, against USD 439,747 million in Asia Pacific and USD 256,476 million in the Americas. Europe grew 6.7% in the year while the world grew 26.2%.
This is a figure about demand, not about production. It counts where chips are sold, not where they are made or designed. Read carefully, it does not say that Europe is losing its chip industry. It says that in 2025 the fastest-growing demand, which WSTS ties to AI infrastructure, was elsewhere.
The counter-case
The strongest objection to our reading is that 2025 was a bad year for ST and a very good year for TSMC and ASML, and that one year proves nothing about structure.
The objection has force. ST's operating income for 2025 includes USD 376 million related to impairment, restructuring charges and other phase-out costs, and its revenues fell 11.1%. A company in the trough of its own cycle will show a lower margin than it would in a normal year. Soitec's fall of 34% in revenue is the same kind of signal, and its own release attributes it to customers working down their inventories.
We accept the objection as far as it goes. It would be wrong to say that ST will always keep a third, or that TSMC will always keep what it kept in 2025. What the objection does not explain is the order. In a year when the whole market grew by 26.2%, the steps that kept more than half of each sale were, in our reading, the ones customers cannot easily source elsewhere: leading-edge manufacturing capacity and the machines that make it possible. That ordering, not the exact numbers, is the claim of this piece.
What would change the reading
Three things would weaken it. If ST's gross margin returned to the level of the foundry and the lithography maker while its markets stayed contested, the idea that scarcity drives margin would need revising. If another company began to supply what ASML supplies at the same level, its margin would be the place to watch. And if the growth that WSTS forecasts for 2026 arrives mainly as memory, as it expects, the next money map may need a seventh step we have not read here.
What this means for your career
The money map is also a map of where scarce skills are paid. Where a step is hard to copy, the people who make it work are hard to replace. None of the eight documents prints a salary, so this piece gives none. What the documents do show is where value stays, and that tells a candidate where to look.
Three places in this map lead directly to work you can try now. Arm's two lines of revenue show that licensing is a craft of its own: someone decides what a design is worth, to whom, and how every chip shipped is counted. Soitec's Photonics-SOI line shows a small, specialised part of the chain growing while the whole fell, in optics for data centres. And the gap between where Europe buys chips and where the fastest demand grows is, in our reading, the question a European chip programme has to answer. CareerOn has a simulation for each.
If you want to work where the value of a design is decided, start with the IP licensing simulation. If you want to steer a European chip programme, start with the semiconductor programme director simulation. If you want to work on the optical links that data centres now need, start with the silicon photonics transceiver simulation. All three are built from the kind of work these companies describe, and each lets you see, before you apply, whether this is the part of the chain you want to join.