A semiconductor manufacturing plant, also known by the acronym fab, is a factory where integrated circuits are produced. A company that does not design chips but makes chips for others is known as a foundry.

Manufacturing plants require a large amount of highly expensive machinery and devices to function and operate. It is estimated that the cost of building a new plant that produces with 10 nm lithography can cost over $2,000 million, while at 5 nm it can be over $5,000 million.[1] Investments of $20,000 to $30,000 in megafactories are increasingly common, taking advantage of government subsidies such as the European Union Chip Law.[2]​.

The central part is the clean room, an area where the environment is controlled to eliminate all dust, since a single particle of dust can ruin the production of an entire batch. The clean room also needs to be protected against vibrations and kept within narrow temperature and humidity ranges. Controlling temperature and humidity is critical to minimizing static electricity.

A clean room contains steppers for photolithography and machines for etching&action=edit&redlink=1 "Engraving (electronics) (not yet redacted)"), cleaning, doping "Doping (semiconductors)") and cutting. All of these machines are extremely precise, and therefore, extremely expensive. The price of the most common equipment for processing 300 mm wafers ranges from 700,000 to 4 million dollars each and some machines, such as steppers, reach 50 million dollars each. A manufacturing plant typically has several hundred machines.

At first the cost of starting a fab was not that expensive, and that is why each integrated circuit manufacturer usually had its own, or if it made small runs (such as the custom chips used in many 8-bit computers) it would commission its manufacturing to another company. But with the passage of time and the increasing miniaturization of circuits, the cost of new plants skyrocketed. This caused two phenomena:

The current panorama is of three types of companies:.

Furthermore, it is common to see how integrated circuit manufacturers subcontract part of their production to foundry companies. This is the case of Freescale, Philips or AMD, which do it to companies like TSMC. Conversely, certain IC manufacturers (such as IBM Microelectronics) offer foundry services to fabless companies.