Fabless Company

Fabless Company

In the semiconductor industry, a company that specializes in the development and sale of semiconductor chips. Fabless companies do not make the chips themselves; rather, they outsource manufacture to foundry companies, which make the chips according to fabless companies' specifications. A fabless company is thus able to keep it capital expenditures to a minimum as it does not have to invest in the construction of foundries to make the semiconductor chips. Most of the time, fabless companies concentrate predominantly in research and development.