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AI supply chain term

Tape-out

Tape-out is the milestone when a finished chip design is handed off to the foundry to be turned into physical silicon.

What it means

Tape-out is the point in chip development where the design is considered complete and its final layout — the exact pattern of every transistor and wire — is released to a foundry to make photomasks and begin manufacturing. The name is a holdover from when layouts were written to magnetic tape. Reaching tape-out means the design has passed exhaustive verification inside EDA tools, because any error caught after this stage is enormously expensive: masks must be remade and a full fabrication cycle re-run. In the AI supply chain, tape-out is the handoff between the design world and the physical world. It sits downstream of EDA software and design IP and upstream of the fab, so a slipped tape-out delays every accelerator, ASIC, or networking chip that depends on it.

Why it matters to investors

Tape-out volume is a leading signal of future chip supply, and it flows through the EDA and design-IP vendors whose tools every tape-out passes through. Those vendors hold durable pricing power because their software is a universal dependency; a delayed tape-out, by contrast, directly exposes the chip's designer to lost time-to-market.

Companies on this part of the chain

Cadence Design SystemsCDNSSynopsysSNPSAlphawave SemiAWEArterisAIP

Named to show where the term sits in the AI supply chain — research, not advice, and never a recommendation to buy or sell.

Related terms

EDA (Electronic Design Automation)EDA is the software used to design, simulate, and verify semiconductor chips before any silicon is manufactured.FoundryA factory that manufactures chips designed by others; leading-edge capacity is scarce.Reticle limitThe reticle limit is the maximum area a lithography tool can print in a single exposure, which caps how large a single chip die can be.ASIC (custom AI chip)Application-Specific Integrated Circuit — a custom chip built for one job, e.g. AI inference.

See Tape-out in the live AI chain.

THE ENTITY maps every constraint onto one live model — which part is tight now, who owns it, and who gets squeezed when it moves. Plain-English reads you can check.

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THE ENTITY is an educational read on the AI supply chain — research, not investment advice. It explains how the chain works and who sits where, never price targets or buy/sell calls.