A business that operates a semiconductor fab for the purpose of fabricating the designs of other companies, such as fabless semiconductor companies, is known as a foundry. If a foundry does not also produce its own designs, it is known as a pure-play semiconductor foundry.
The central part of a fab is the clean room, an area where the environment is controlled to eliminate all dust, since even a single speck can ruin a microcircuit, which has features much smaller than dust. The clean room must also be dampened against vibration and kept within narrow bands of temperature and humidity. Controlling temperature and humidity is critical for minimizing static electricity.
The clean room also contains the steppers for photolithography, etching, cleaning, doping and dicing machines. All these devices are extremely precise and thus extremely expensive. Prices for most common pieces of equipment for the processing of 300 mm wafers range from $700,000 to upwards of $4,000,000 each with a few pieces of equipment reaching as high as $50,000,000 each (e.g. steppers). A typical fab will have several hundred equipment items.
Typically an advance in chip-making technology requires a completely new fab to be built. In the past, the equipment to outfit a fab was not terribly expensive and there were a huge number of smaller fabs producing low-volume chips. However, the cost of the most up-to-date equipment has since grown to the point where a new fab can cost on the order of several billion dollars.
Another side effect of the cost has been the challenge to make use of older fabs. For many companies these older fabs are useful for producing designs for unique markets, such as embedded processors, flash memory, and microcontrollers. However for companies with more limited product lines, it's often best to either rent out the fab, or close it entirely. This is due to the tendency of the cost of upgrading an existing fab to produce devices requiring newer technology to exceed the cost of a completely new fab.
There has been a trend to produce ever larger wafers, so each process step is being performed on more and more chips at once. The goal is to spread production costs (chemicals, fab time) over a larger number of saleable chips. It is impossible (or at least impractical) to retrofit machinery to handle larger wafers. This is not to say that foundries using smaller wafers are necessarily obsolete; older foundries can be cheaper to operate, have higher yields for simple chips and still be productive.
The current state-of-the-art for wafer size is considered to be 300 mm (12 in). However, more than half of current wafer manufacturing capacity in the United States is tooled for the 200 mm (8 in) size; 300 mm production is not expected to exceed 200 mm production until 2008. However, Intel is currently pushing semiconductor equipment manufacturers to move to the 450 mm wafer size. Additionally, there is a large push to completely automate the production of semiconductor chips from beginning to end. This is often referred to as the "lights-out fab" concept. A similar phenomenon was witnessed in the automobile manufacturing business during the 1980's.
The International Sematech Manufacturing Initiative (ISMI), an extension of the US consortium SEMATECH, is sponsoring the "300 mm Prime" initiative. An important goal of this initiative is to enable fabs to produce smaller lots of chips; this is a response to shorter lifecycles seen in consumer electronics. The logic is that a fab that can produce smaller lots can more easily and efficiently switch its production to supply chips for a variety of electronic devices as they rapidly emerge in the marketplace. Another important goal is to reduce fabrication time by reducing the waiting time between processing steps.