Over the past several years, the semiconductor market has changed from a primarily vertically integrated model (e.g., ownership of design through manufacturing), to one of chip design efforts separated from production fabs (the foundry model). This has allowed many new entrants into the market that no longer needed to raise incredible sums to build and operate their own fabs.
With state of the art fabs now costing $5 billion to $10 billion each, this model has provided an advantage to many smallish firms with great ideas for chips, but no means to build advanced production facilities. It also created mega-fab companies (e.g., TSMC, Samsung, Global Foundries) which were able to invest in facilities and sell their production capacity to all comers. This fundamental shift of the supply chain created the vibrant and highly competitive chip market we see today.
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