[hedgehog]

I suspect AMD's assessment at the time was similar so they offloaded fab and hopped on the TSMC bandwagon. It's worked out well for them. Interestingly Global Foundries decided not to keep chasing leading edge and instead invest deeply in nominal 12nm. They describe it as a "mature platform" that is "reliable and trusted for automotive, consumer, industrial and aerospace & defense applications".

As for whether this dynamic helps level the playing field between governments, I don't see how it would. Ever more expensive fabs make it harder rather than easier to stay competitive.

The aviation world has some historical parallels. China has been working to catch up on jet engines for at least 40 years and they're still not quite there yet. Not for lack of effort, engineering talent, theoretical understanding, etc, certain kinds of industrial capability are just hard and slow to build. A much smaller country would have no hope. My guess is chip production ends up being similar.