fabless

A fabless semiconductor company designs integrated circuits but outsources all manufacturing to external foundries, focusing investment on design innovation rather than fab construction. Major fabless companies: (1) NVIDIA—GPUs, AI accelerators (~$60B+ revenue); (2) Qualcomm—mobile SoCs, RF, connectivity; (3) AMD—CPUs, GPUs (went fabless 2009, spun off GlobalFoundries); (4) Broadcom—networking, wireless, enterprise; (5) MediaTek—mobile SoCs, IoT; (6) Apple—custom silicon (M-series, A-series); (7) Marvell—data infrastructure; (8) Xilinx/AMD—FPGAs. Fabless advantages: (1) Capital efficiency—no $15-30B fab investment, focus capex on design; (2) Process choice—select best foundry/node for each product; (3) Flexibility—pivot quickly between market segments; (4) Focus—concentrate talent on design differentiation; (5) Scalability—add capacity by purchasing more foundry wafers. Fabless disadvantages: (1) Foundry dependency—capacity allocation controlled by foundry (2021 chip shortage exposed this); (2) No process customization—use foundry's standard process; (3) IP risk—design data shared with foundry; (4) Lead time—dependent on foundry cycle time and priorities; (5) Cost—foundry margin added to product cost. Fabless model economics: design team of 500-2000 engineers vs. fab workforce of 2000-5000. Fabless R&D spend: 15-30% of revenue (vs. IDM 12-20% including manufacturing R&D). Industry evolution: fabless companies now dominate semiconductor revenue rankings (NVIDIA #1 by market cap). The fabless-foundry ecosystem enabled the explosion of semiconductor innovation by lowering barriers to entry for chip design startups and enabling specialization.