Q:

How are other chipmakers keeping up with TSMC if their processes are just the best?

In the news recently was Intel's stock falling 20% because its 7nm processes are being delayed by 6+ months. The argument seems to be that Intel is already behind (since they're using 10nm processes while TSMC is on 7nm processes, soon to be 3nm processes), so it's only going to get worse for Intel. The entire chipmaking process isn't something I understand very well however, so I'm hoping someone can enlighten me.
Why exactly is it important to be on 3nm processes instead of 5nm or 7nm? This article says:

There are a few major underlying technologies that dictate the potency of any chip. The most fundamental rule of processors still holds true: The densest process nodes, provided they have decent power, performance, and area (PPA) characteristics, will often win the battle if paired with a solid microarchitecture.

I'm guessing this means that 3nm processes are "better" because for whatever reason I don't understand, it fundamentally improves the PPA characteristics. In other words, although you can improve while on 10nm processes, you'll never catch someone on 3nm processes - sort of like how a 40-year old can run faster with training, but will never catch someone who's 25 years old.
But if this is the case, then TSMC's processes are just the best in market, and they'll be leaving everyone else in the rear-view mirror. That hasn't happened though - the same article notes that Intel's processors still leads in certain categories, such as overclocking and gaming performance. Somehow Intel has managed to remain competitive with TSMC in spite of poorer technology. Even more surprisingly, SMIC manages to rake in billions of dollars in revenue in spite of using only 14nm processes. Perhaps one could say "therefore their revenues are going down", but they aren't, and that's in spite of Intel/TSMC/Samsung being on 10nm and smaller processes for years. Can someone explain what's going on?
I'm sure there are other applicable tags than just "Intel" and "fabrication", but I genuinely don't know what they are - if you do feel free to edit them into the question.

A:

Somehow Intel has managed to remain competitive with TSMC in spite of
poorer technology

Intel has a lot of experience in designing CPUs. A "stupid" design using the fastest technology can be worse (performance wise) than a "smart" design using somewhat older (and slower) technology.
TSMC only does chip-making they do not design, they are a foundry , so whatever chips are made by TSMC are not designed by them. The chips are designed by Qualcomm, Broadcomm and many other "fabless" semiconductor companies.
SMIC is also a foundry, just like TSMC. SMIC concentrates on older technology nodes that are "less interesting" to foundries like TSMC. A lot of chips are needed in mobile phones, cars etc. Not all of these need to be made in the latest-and-greatest fastest technology.
Realize that making a "simple" chip which can be made (or is already an existing design) in for example 14 nm (or much older, larger feature size technologies) is much, much cheaper than using the latest technology node. I mean: very often there is simply no need to use the newest technology node.

... up with TSMC if their processes are just the best?

Are they "the best"? What is "the best"? For a Soc powering the latest and greatest smartphone, indeed using the smallest manufacturing node might be essential.
But how about a chip used in a pocket calculator or microcontroller in an espresso machine? For these applications the chip needs to be cheap. A simple microcontroller, when bought in large quantities, can be had for a few cents per chip. I guarantee you that these chips will be made in an "ancient" technology, like 0.35 um CMOS (just my guess). The (at the time very expensive) equipment needed for making such chips has been written off long ago so you don't need to pay a premium price because expensive equipment is needed. That allows for chips that are extremely cheap. In many applications "cheap" is much better than "latest and greatest".

A:

A single number does not make a better product.
A better product does not automatically and immediately capture all the market.
A better process does not have infinite capacity.

A smaller process number in nanometers ("lambda") usually indicates that you can fit more transistors onto the chip, and they will individually consume less power. However, the power density has become a problem, including the "leakage" power from transistors that are not currently doing any work. As a result, modern high-density processors are made up of a large number of cores, and some of the cores have to be idle or run at less than maximum speed most of the time.
Using your larger number of transistors effectively to provide useful features and accelerate particular workloads is still the big challenge for designers.
But beyond the technical considerations, the whole field of product design and product marketing knows that the reasons humans buy products are more complicated and holistic. Much as people would like to reduce product quality to a single, emotionless, one-dimensional number, it doesn't work that way.

Intel's branding and marketing dominance has been formidable for the last forty or so years. Even if their products were spectacularly bad one year they would still have a large market share. Just as oil tanker takes a long time to turn round and an even longer time to sink, so does a dysfunctional mega-corporation.

Not all semiconductors need or benefit from the latest process. Here at Cirrus Logic (CRUS) we've only just got on to 22nm, but are doing very nicely because a large part of our chips are analogue: power amplifiers and similar.

