Nvidia is a big customer at wafer fabs run by Taiwan Semiconductor and United Microelectronics.
Plus these chips are outsourced to factories or fabs whose capabilities are well known.
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That essentially means that one-third of the world's chip factories, or "fabs, " were sitting idle.
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But if they fall short, Intel could wind up with bigger fabs and more engineers than it needs.
They were all forced to invest billions in new fabs just to break even because standing still meant certain death.
OK, yes, I know, chip fabs are at the extreme end of capital requirements but this is at least indicative.
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What's worse, nearly 40 new DRAM fabrication plants, or fabs -- almost half in Asia -- are coming onstream this year.
Each group had its own submicron laboratories, fabs and systems-on-a-chip design libraries.
Intel created an enormously complex procedure that builds semiconductor factories (semi fabs).
But the cost of building fabs has become prohibitive, and the club of companies that can afford to play is shrinking each year.
And the company does all this while steering clear of the messy business of building its own handsets or running its own chip fabs.
As South Korea's chaebol borrowed to pay for their fabs in the early 1990s, debt climbed to seven times the value of their equity.
In the last year Intel has been moving towards the foundry business that is outsourcing its semiconductor fabrication plants, or fabs, to other chipmakers.
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The company said it has begun shifting production to other fabs.
Helyar writes that that manufacturers have started to cut orders to chip suppliers, and that chip maker cuts to the contract fabs are likely to follow.
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There are no guarantees, but if it can ditch its fabs, then AMD has proven it can make the shifts necessary to have a shot at survival.
In Shanghai alone two new fabs are under construction, another two are on the drawing board, and over a dozen more are in the early planning stages.
The Cupertino-based company is actively looking for a partner to build the ARM-based chips used in iDevices (iPod touch, iPad and iPhone), and currently made in Samsung fabs.
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He asserts that the improving demand picture offsets his previous concerns about higher supply due to new NAND fabs from Samsung, Toshiba and Micron (MU) expanding production in 2011.
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In the booming economy of the mid-1990s the decidedly unsexy but important industrial gases business was crowded with players that overbuilt capacity on optimistic demand from refineries and semiconductor fabs.
Because the chips can be manufactured using conventional fabs and aren't subject to the same manufacturing constraints as traditional flash, they may also end up being far cheaper per gigabyte.
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In the early 1980s, the rising cost of fabs created a new kind of company that designed chips but did not want to be in the business of running multi-billion-dollar fabs themselves.
Because volumes have fallen in the PC business, Intel is increasingly facing a problem of keeping its fabs filled, which is critical because otherwise they start to lose money in large quantities rather quickly.
Since GaAs (Gallium Arsenide) fabs are similar to analog fabs in that they do not become outdated quickly, management believes it has sufficient capacity to continue growing its business for two to three more years.
Though Intel and TI are integrated device manufacturers investing billions annually in new wafer fabs, Qualcomm has been able to maintain generally lower costs by farming out production of their leading edge designs to foundries -- such as Taiwan Semiconductor, Chartered Semiconductor and IBM--and moving to the next node (now 65 nanometers) whenever costs dictate.
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