Fabless versus Integrated Device Manufacturer
Introduction
The technology boom years of the 1970s were associated with the Integrated Device Manufacturer (IDM) business model, when all top manufacturers of semiconductors maintained a vertically integrated business model: designing, testing, and building their products. Then, in the early 1980s, small manufacturers began entering the marketplace. Due to huge capital investments, there were huge barriers to the entry. Hence, IDMs were producing more chips than they could actually use in their products. As this surplus continued to grow due to rapid growth of semiconductor industry, it led to the creation of a fabless business model. The term “fabless” means that the company does not ...
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