What defines a fabless semiconductor company?

• A. A company that focuses on chip design and outsources fabrication to a foundry.
• B. A company that only fabricates chips.
• C. A company that manufactures and sells standard computer chips in-house.
• D. A company that provides end-user devices.

Answer: (A)

Fabless means a company focuses on designing chips and developing IP, while outsourcing the actual manufacturing to a dedicated foundry. The key is separation of design from production: the company invests in architecture, verification, and customer relationships, and relies on external fabrication plants to manufacture the chips. This model explains why it’s the best answer, since it captures the essence of being chip-design–driven with fabrication offloaded to a foundry. The other descriptions describe different models: a company that only fabricates chips shadows a pure foundry rather than being fabless; a company that manufactures and sells chips in-house is an integrated device manufacturer; a company that provides end-user devices is about products rather than the design/manufacturing split.