Fabless Company

DEFINITION of 'Fabless Company'

The Global Semiconductor Alliance defines fabless as follows:

Fabless (without fab) refers to the business methodology of outsourcing the manufacturing of silicon wafers, which hundreds of semiconductor companies have adopted. Fabless companies focus on the design, development and marketing of their products and form alliances with silicon wafer manufacturers, or foundries.

BREAKING DOWN 'Fabless Company'

The fabless model is an attractive and popular option for many semiconductor companies. By adopting a fabless business strategy, a company can focus time and resources on the design of innovative integrated circuits, while avoiding the high cost of building, operating, and upgrading a manufacturing facility.

RELATED TERMS
  1. Consumables

    Goods used by individuals and businesses that must be replaced ...
  2. Philadelphia Semiconductor Index ...

    A price-weighted index composed of 18 U.S. semiconductor companies ...
  3. Morris Chang

    The founder, chairman and CEO of Taiwan Semiconductor Manufacturing ...
  4. Semiconductor Industry ETF

    A sector-following fund that invests in developers, manufacturers ...
  5. Semiconductor

    A materials product - usually comprised of silicon - which conducts ...
  6. Silicon Valley

    A part of the San Francisco Bay Area that is known for the many ...
Related Articles
  1. Analyzing Apple's Threat of New Entrants (AAPL)

    Understanding the competitive forces within an industry can be as simple as looking at five factors. There is the rivalry within the industry itself, but there is also a collective power a company’s ...
  2. Stock Analysis

    Is Smaller Better? In the Chip Sector, Yes: TSM

    One of the world's biggest semiconductor manufacturers, one you might never have heard of, creates products you use every day.
  3. Mutual Funds & ETFs

    3 ETFs That Invest in Semiconductors (SOXX, SMH)

    Obtain information on three of the most widely traded ETFs that investors utilize to gain investment exposure to the important semiconductor industry.
  4. Investing Basics

    The Industry Handbook: The Semiconductor Industry

    The semiconductor industry lives - and dies - by a simple creed: smaller, faster and cheaper. The benefit of being tiny is pretty simple: finer lines mean more transistors can be packed onto ...
  5. Markets

    Trading Semiconductor Chip Stocks

    Historically, mid- and small-cap semiconductor companies have generated momentum because they usually show the most growth potential. Companies within this range are often those that have yet ...
  6. Stock Analysis

    The World's Top 10 Semiconductor Companies (TSM,INTC)

    Discover how some of the most successful companies in the semiconductor industry are well-known brands while others are thriving in relative obscurity.
  7. Mutual Funds & ETFs

    SMH: Market Vectors Semiconductor ETF

    Discover how the Market Vectors Semiconductor ETF chooses its securities, and learn the types of investors for whom this fund is most appropriate.
  8. Trading Strategies

    The Basics Of Trading Chip Stocks (INTC, TXN)

    Semiconductor companies offer an endless variety of trading and investment opportunities.
  9. Mutual Funds & ETFs

    The Top 5 Semiconductor ETFs for 2016 (SMH, SOXX)

    Discover how you can get immediate exposure to semiconductor stocks through five of the best semiconductor ETFs available in 2016.
  10. Investing

    The Semiconductor Sector is on the Verge of a Breakout (SMH, INTC)

    The semiconductor sector may be on the verge of a major breakout that provides market leadership in 2016.
RELATED FAQS
  1. What are "fabless" chip makers and why are they important in the semiconductor market?

    Learn about fabless chip makers and why some of the biggest names in the semiconductor industry have adopted the fabless ... Read Answer >>
  2. What are the most popular leveraged ETFs that track the electronics sector?

    Discover the most popular leveraged ETFs that track the electronics sector. Semiconductors are an integral member of the ... Read Answer >>
  3. What are foundry companies in the electronics sector?

    Explore the role of foundry companies within the electronics industry. Find out how foundries improve their products and ... Read Answer >>
  4. What consumer products drive most of the demand for chips produced by semiconductor ...

    Learn how the demand for consumer products, such as smartphones and cloud-based services, is increasing the market for semiconductor ... Read Answer >>
  5. What impact does Moore's Law have on the electronic sector?

    Understand the groundbreaking implications of Moore's Law on the economic health of several industries, including semiconductors ... Read Answer >>
  6. What are the best mutual funds for investing in the electronics sector?

    Learn which mutual funds are popular among investors interested in the electronics industry and how these mutual funds add ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center