In the semiconductor industry, “fabless” refers to a company that outsources its manufacturing to another provider.
A fabless company designs, develops, and markets semiconductor products but does not manufacture them. This business model allows fabless companies to focus on their core competency of product development while leaving manufacturing to those with the necessary facilities and expertise.
How Fabless Manufacturing Works
What is a fabless semiconductor firm? A fabless semiconductor firm is a type of semiconductor company that outsources the fabrication (or manufacturing) of its semiconductor chips to a foundry. A foundry is a specialized factory that produces silicon wafers and other semiconductor products according to the specifications provided by the fabless company.
The relationship between a fabless company and a foundry is similar to the relationship between an original equipment manufacturer (OEM) and a contract manufacturer.
While OEMs design and market products, they often outsource the actual manufacturing to contract providers. Similarly, fabless companies focus on design and marketing while outsourcing fabrication to foundries. Some of the top fabless companies in the United States are Qualcomm, Broadcom, Apple, MediaTek, and Nvidia.
Top Fabless Semiconductor Companies in the U.S.
Let’s have a look at some of the biggest fabless companies in the country and see how they operate.
Qualcomm is one of the world’s leading fabless semiconductor companies. The company designs and markets wireless telecommunications products and services. It also develops technologies for wireless communications, storage, and display.
Broadcom is a leading fabless semiconductor company that provides solutions for wired and wireless communications. Headquartered in Irvine, California, the company offers a broad range of products that includes data center networking, enterprise software, broadband connectivity, and set-top boxes.
Apple is one of the largest technology companies in the world. The Cupertino, California-based company designs and markets consumer electronics, computer software, and online services. It also manufactures a variety of electronic products including smartphones, tablets, and laptops.
MediaTek is a Taiwan-based fabless semiconductor company with operations in the U.S. It designs and markets semiconductor products for wireless communications, computing, and consumer electronics. The company’s products include 4G LTE chipsets, chips for smart TVs, and home entertainment systems.
Santa Clara-based Nvidia is a leading fabless semiconductor company that specializes in graphics processing units (GPUs) and Tegra processors for the gaming, automotive, and professional visualization markets. The company also manufactures System-on-a-Chip (SoC) products for mobile devices, smart home appliances, and data centers.
Benefits of Being In Fabless Semiconductor Companies
There are several benefits of going fabless.
First, it allows companies to focus on their core competency, which is product development. Because they outsource fabrication, they can allocate their resources to other areas of their business, such as research and development, marketing, and sales.
Second, it allows companies to reduce costs. By outsourcing fabrication to a foundry, a fabless company can avoid the capital expense of building a manufacturing facility. In addition, foundries are often able to produce semiconductor products at a lower cost than fabless companies because they have economies of scale.
Third, being fabless allows companies to be more agile. Because they don’t have to maintain a manufacturing facility, fabless companies can respond quickly to changes in market demand. They can also easily ramp production up or down as needed.
Drawbacks of Fabless Companies
While there are many benefits to being fabless, there are also some disadvantages.
First, because they outsource fabrication, companies can be subject to the whims of their suppliers. If a foundry stops producing chips or raises its prices, the fabless company may be forced to find a new supplier. This can lead to delays in product development or even disruptions in production.
Second, they have less control over the quality of their products. Because they don’t have direct control over the manufacturing process, there is a greater potential for defects.
Third, they can be more expensive to manufacture. This is because the process of designing and manufacturing a semiconductor chip is complex and requires specialized equipment and expertise. As a result, the cost of fabrication is usually higher than the cost of assembly.
Finding The Best Fabless Companies To Work For
If you’re interested in working for a fabless semiconductor company, there are a few ways to find them.
One is to search online job boards. Websites like Indeed and Monster list open positions at fabless companies. You can also search for specific companies on these websites.
Another is to attend trade shows and conferences. These events are often attended by representatives from fabless companies who are looking to recruit new talent.
Finally, you can reach out to your network of contacts. If you know someone who works in the semiconductor industry, they may be able to help you connect with a fabless company.
Overall, the best and most efficient way to find a fabless company is through a recruiter that has manufacturing expertise and specializes in placing candidates in these types of companies.
At TruPath, we have a team of expert recruiters who can help you find the perfect position at a fabless company. We work with some of the top fabless firms in the country and can help you find a position that’s a perfect match for your skills and experience.