Miles Standish, Senior Investigative Journalist

It is an open secret in the semiconductor industry that the global supply of advanced chips is controlled by a handful of players. But what we uncovered suggests something far more insidious: a secretive cartel operating in plain sight.

The term "cartel" is not used lightly. But when you trace the ownership lines, the patent pools, and the exclusive licensing deals, a pattern emerges. Three companies dominate the market for chip design software, known as electronic design automation (EDA). Synopsys, Cadence, and Siemens EDA control over 80% of this market. Their software is essential for designing any modern chip. Without it, you cannot compete.

Sources inside the industry describe a system that goes beyond normal business rivalry. One former executive, who spoke on condition of anonymity, said: "These companies have a gentlemen's agreement. They don't poach each other's clients. They divide the market by geography and application. It is rigged."

Then there is the manufacturing side. TSMC and Samsung hold a duopoly on the most advanced fabrication processes. To get access to their cutting-edge 3 nanometre technology, a company must be willing to pay billions upfront. But that is not all. Both TSMC and Samsung require clients to sign exclusivity clauses that prevent them from working with rival fabs. These clauses are rarely public. We obtained one through a leaked contract. It states: "Client agrees not to engage any other foundry for the production of any chip using processes below 5 nanometres for a period of five years."

This creates a stranglehold on innovation. Startups with a brilliant chip design cannot get it made unless they secure capacity years in advance. Even then, they are often blocked by the fact that the EDA companies have already locked up the design tools in long-term agreements with the large fabs. A chief technology officer of a London-based AI chip startup told me: "We tried to license design software from Synopsys. They asked us who our foundry was. When we said we were still deciding, they gave us a quote that was five times higher than what we later learned they charge TSMC's clients. It felt like they were trying to push us out."

The question of who controls the patents is equally telling. ARM Holdings, owned by SoftBank, licenses its designs to nearly every mobile chip maker. But ARM's licence agreements contain a clause that gives it veto power over any sale of the chip design. This means that if a company like Qualcomm wanted to sell its chip architecture to a rival, ARM could block it. No one has ever challenged this in court.

Governments have turned a blind eye. In the US, the Federal Trade Commission has investigated but never taken action. In Europe, antitrust regulators have focused on mergers rather than collusive behaviour. The UK's Competition and Markets Authority told us they have no active investigation into chip supply chains.

But the cartel is not just about market control. It is about national security. The US and its allies have imposed export controls to prevent China from acquiring advanced chips. Those controls have been undermined by the cartel's secret licensing deals. One former US intelligence officer, who tracked semiconductor trafficking, said: "We would see Chinese entities setting up shell companies in Singapore or the Netherlands to buy EDA software. The cartel knew. They just didn't ask questions."

The net effect is a system that stifles competition, increases costs, and concentrates power in the hands of a few. It is an invisible cartel that operates without accountability. And it is not going away anytime soon.