Semiconductor industry and market

Fabs place particular emphasis on keeping tool utilization high. Which is an appropriate reason?

  1. ABecause stopping tools makes the cleanroom dirty
  2. BBecause high utilization makes tools last longer
  3. CBecause fixed costs such as depreciation on huge investments in tools and buildings are large, so lower output sharply raises the cost per chip
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Answer: C. Because fixed costs such as depreciation on huge investments in tools and buildings are large, so lower output sharply raises the cost per chip

A distinctive feature of fab costs is the large share of fixed costs incurred regardless of output, such as depreciation on expensive tools and buildings. When utilization drops, the same fixed costs are spread over fewer chips and the cost per chip rises. Fabs therefore work to keep running as much as possible even in downturns.

  • A. Stopping tools does not in itself make the cleanroom dirty.
  • B. Utilization and tool life are not the reason here.
  • C. Correct. It is because fixed costs make up a large share.
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More Semiconductor industry and market questions

  1. Which organization, made up of major semiconductor makers worldwide, publishes statistics and forecasts of semiconductor market shipments?
  2. Which international industry association, whose members include makers of semiconductor manufacturing equipment and materials, develops industry standards and holds the SEMICON exhibitions?
  3. Which correctly describes chips made on so-called mature (legacy) processes older than the 28 nm generation?
  4. Which set correctly names major semiconductor manufacturing equipment makers?
  5. Which business model keeps fab investment down by making some products in its own fabs while outsourcing leading-edge products and the like to foundries?