Semiconductor industry and market

Which is an appropriate reason the division of labor between foundries and fabless companies spread?

  1. ABecause manufacturing technology became simple
  2. BBecause investment in advanced fabs became huge, making it more efficient to separate design and manufacturing
  3. CBecause demand for semiconductors fell
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Answer: B. Because investment in advanced fabs became huge, making it more efficient to separate design and manufacturing

Building an advanced fab requires huge investment, and it became hard to fill a fab with one company's products alone. Concentrating manufacturing at specialized foundries lets many customers share equipment, and design companies can focus on product development without owning fabs. This is how the division of labor spread.

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More Semiconductor industry and market questions

  1. Which is an appropriate reason the back end (packaging) has become more important in recent years?
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  3. What is a company called whose business model is licensing design assets (IP) such as CPUs to other companies for fees?
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