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. Tech Street

    A term used in the financial markets and the press to refer to ...
  2. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs ...
  3. Tech Bubble

    A pronounced and unsustainable market rise attributed to increased ...
  4. Disruptive Technology

    A technology that significantly alters the way that businesses ...
  5. Unicorn (GOOG, FB)

    In the world of business, a unicorn is a company, usually a start-up ...
  6. Cost Test

    A standard test applied to a process to determine if the net ...
Related Articles
  1. Stock Analysis

    The Top 5 Dividend-Paying Semiconductor Stocks for 2016 (CY, LLTC)

    Discover the top 5 dividend-paying semiconductor stocks for 2016, with a summary, growth outlook and expected price target of each company.
  2. Insurance

    A Checklist For Successful Medical Technology Investment

    Find an investment that will give your portfolio a shot in the arm.
  3. Mutual Funds & ETFs

    Technology Sector Funds

    Evaluate past performance before investing in these types of gadget funds, as technology investors have been on a wild ride for a few years.
  4. Investing

    Clean Or Green Technology Investing

    Innovations in energy and consumption grow as companies adopt them to reduce costs.
  5. Active Trading

    The Ups And Downs Of Biotechnology

    This volatile sector can provide huges gains, but there's also lots of downside.
  6. Investing

    5 Up and Coming Social Media Startups

    Although the days of Facebook's dominance aren't close to being over, here are some new creative platforms gaining traction on the worldwide web.
  7. Investing News

    Public Vs. Private Tech Valuations: What's Driving the Divide?

    The gross valuations over the past five years are more indicative of the market than the true value of the company itself.
  8. Investing

    How Digital Payments Will Change Commerce in 2016

    The way we transfer and spend money is constantly evolving, and 2016 is poised to expand digital payments like we've never seen before.
  9. Entrepreneurship

    Digital Nomads in the Modern Economy

    Digital nomads compose a growing portion of the modern economy.
  10. Stock Analysis

    Why Alphabet is the Best of the 'FANGs' for 2016

    Alphabet just impressed the street, but is it the best FANG stock?
RELATED FAQS
  1. What are "fabless" chip makers and why are they important in the semiconductor market?

    Fabless chip makers are companies that produce semiconductors for use in various types of electronics, such as digital cameras, ... Read Full Answer >>
  2. Is Apple Pay safe and free?

    Apple Pay is a mobile payment system created by Apple to reduce the number of times shoppers and buyers have to pay for goods ... Read Full Answer >>
  3. How has Google's operations strayed from its original mission statement?

    Google's (GOOG) mission statement has been the same since its inception in 1998: "Organize the world's information and make ... Read Full Answer >>
  4. What role does the OEM (original equipment manufacturer) play in the finished product?

    Original equipment manufacturers (OEMs) do not typically play much of direct role in determining the finished product. However, ... Read Full Answer >>
  5. What is the difference between an OEM (original equipment manufacturer) and a VAR ...

    An original equipment manufacturer (OEM) is a company that manufactures a basic product or a component product, such as a ... Read Full Answer >>
  6. What is the QQQ ETF?

    The PowerShares QQQ, previously known as the QQQQ, is a widely held and traded exchange-traded fund (ETF) that gives investors ... Read Full Answer >>
Hot Definitions
  1. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
  2. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
  3. Discouraged Worker

    A person who is eligible for employment and is able to work, but is currently unemployed and has not attempted to find employment ...
  4. Ponzimonium

    After Bernard Madoff's $65 billion Ponzi scheme was revealed, many new (smaller-scale) Ponzi schemers became exposed. Ponzimonium ...
  5. Quarterly Earnings Report

    A quarterly filing made by public companies to report their performance. Included in earnings reports are items such as net ...
Trading Center