BILLIONS, NOT MILLIONS

A leading-edge fab is one of the most expensive factories on Earth

on the order of $10 billion to $20 billion

Building a single leading-edge fab commonly costs somewhere in the range of $10 billion to $20 billion, and that figure keeps climbing with each new generation of process technology. That single number explains most of how this industry is structured.

Very few companies on Earth can write a check that size for one factory.

WHERE THE MONEY GOES

Buildings, tools, and constant upkeep

Cleanroom construction A building with extraordinary vibration, air, and power requirements

The tools themselves A single EUV scanner alone can cost well over $100 million

Research and development Each new process node needs years of its own dedicated R&D

Ongoing operation Tools, materials, and staff cost money every single day, not just once

The building is the cheap part; the tools inside it are what really cost billions.

WHY THIS MATTERS

A short list of companies can play at all

leading-edge fabs: a handful of companies, worldwide

Because the entry cost is so high, only a small number of companies worldwide operate fabs at the leading edge of process technology at any given time. Everyone else either builds at an older, cheaper node, or doesn't build chips at all and designs fabless instead.

Fab cost alone filters out almost every company that might otherwise want to compete.

THE VOLUME REQUIREMENT

A fab has to run constantly to pay for itself

billions of dollars, recovered one chip at a time

A fab that cost billions to build only earns that money back by running around the clock for years, turning out enormous volumes of chips. That pressure is part of why yield, covered earlier in this course, matters so much: every failed die is a small piece of an enormous investment, wasted.

Yield and fab cost are the same economic problem, seen from two different angles.

UNIT 44 STUDY COMPLETE

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