for gaining legal rights to be a preferred producer is the only way to maintain a monopoly in a market setting.
Surely you are aware of economic moats that have nothing to do with government privileges. Many things are very very hard to compete with from scratch. Take the advanced chips issue - there are 2 companies that can make 3nm chips IIRC, TSMC and Samsung. Many governments would love to have the manufacturing in their country, but even with massive incentives, we’re 5-10 years out at best of anything being completed. This isn’t a limit of IP (though there’s that too), it’s a limit of trained up people, processes and equipment that’s extremely expensive.
Now lets say you think TSMC charges too much, and you could do it cheaper. Well, first you need billions of dollars to just build your plant. Then you need years to get trained people who can get reasonable yields from it. So here you’re at 10 years or so, when you’re just dumping money into a hole. Now, you’re BCMC (Better Cheaper Manufacturing Company) - which people reasonably distrust when you’re the new kid on the block in a complicated and difficult manufacturing product. So you have to sell lower, probably at a loss as you work out efficiencies. And not a little lower, but you have to entice people to try out this “off brand”.
Can you see why people might not be rushing to compete with TSMC?
Oh, and if you manage to get reasonably good, there’s also a good chance TSMC just buys you out to prevent competition. This happens all the time in pretty much all fields.
So while it’s hard to have a T-Shirt making monopoly, or a farmers market monopoly, it’s much easier to defend a capital intensive industry.
Surely you are aware of economic moats that have nothing to do with government privileges. Many things are very very hard to compete with from scratch. Take the advanced chips issue - there are 2 companies that can make 3nm chips IIRC, TSMC and Samsung. Many governments would love to have the manufacturing in their country, but even with massive incentives, we’re 5-10 years out at best of anything being completed. This isn’t a limit of IP (though there’s that too), it’s a limit of trained up people, processes and equipment that’s extremely expensive.
Now lets say you think TSMC charges too much, and you could do it cheaper. Well, first you need billions of dollars to just build your plant. Then you need years to get trained people who can get reasonable yields from it. So here you’re at 10 years or so, when you’re just dumping money into a hole. Now, you’re BCMC (Better Cheaper Manufacturing Company) - which people reasonably distrust when you’re the new kid on the block in a complicated and difficult manufacturing product. So you have to sell lower, probably at a loss as you work out efficiencies. And not a little lower, but you have to entice people to try out this “off brand”.
Can you see why people might not be rushing to compete with TSMC?
Oh, and if you manage to get reasonably good, there’s also a good chance TSMC just buys you out to prevent competition. This happens all the time in pretty much all fields.
So while it’s hard to have a T-Shirt making monopoly, or a farmers market monopoly, it’s much easier to defend a capital intensive industry.