Summary Most semiconductor companies have underestimated how much it costs to stay viable over the long term. The history of the semiconductor business is littered with the bodies of companies who gave themselves away through low price. Intel continues to lead and flourish through high margins and technology path-finding. A reader recently posted a comment that started me thinking. He suggested that Intel (NASDAQ:INTC) might be justified in their high margin pricing. I wrote the following answer to his comment, and then thought to share it with the Seeking Alpha community, as a whole, by posting it as an article. Reader, You've hit on a very subtle point. It is very expensive to continually advance the state of the art in semiconductors and is getting even more expensive all the time. Perhaps Intel is the ONLY semiconductor company that understands how much it costs to maintain this leadership over a 40-year timeframe. The give-away-artists are all gone... Fairchild Semiconductor (NASDAQ:FSC)? Fairchild is Where the Intel founders came from. One of the Intel founders, Robert Noyce, invented the Planar Process while at Fairchild. The Planar process is still the foundation for the lithographic magic used to make integrated circuit to this day. Fairchild owned the patent to the planar process and was paid royalties by everyone in the semiconductor business for many years. Fairchild spawned National Semiconductor (National), AMD (NASDAQ:AMD) and many other players in the business. Fairchild itself fell on bad times and was sold over and over again until finally National wound up buying them. National spun them off as the discrete transistor company they started as. What a humiliation. National Semiconductor itself was finally bought by Texas instruments (NASDAQ:TXN) pretty much for their customer list. National was running 150mm production lines when the big players had been at 300mm for a decade. National and Fairchild were the victims of not (not being able to?) investing in the manufacturing end of the business More