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In the coming few years, several new semiconductor FABs will start production. Several of these were part of long-term semiconductor requirements. Few started construction based on the semiconductor shortages and the push to mitigate such a scenario in the future. These new FAB required years of planning and have invested billions of dollars. Thus, the impact of these semiconductor FABs on the semiconductor industry is going to be significant.
One of the impacts is the generation of employment, which will bring a new workforce to the semiconductor industry. It will also benefit the economy in the long term. And, for FABs situated closer to universities, such development can also drive industry-academia collaboration, which has the potential to keep supplying skilled resources.
Employment: New Employment Generation Opens New Career Opportunity.
Options: There Are Several Options For The Semiconductor Companies To Select From.
Apart from employment, the new semiconductor FABs will provide more options to the semiconductor industry. These options will ensure the FAB-LESS companies have more FABs to reach out to and thus can also enables a way to diversify the manufacturing of their products.
New semiconductor fabrication capacity also restores the supply and demand balance. Thus, reducing the overall cycle time. However, doing so demands time and continuous investment, and it is not always an easy process.
The positive impact of new semiconductor FABs is many and not limited to employment and options. However, there are also downsides to having more semiconductor FABs.
One such downside is the oversupply or overcapacity. While new FABs are certainly going to provide more options to the industry. However, market demand also plays a key role. If the market demand is strong, the new FABs will be 100% occupied. If not, then there is a strong possibility that the new FABs might not be able to run at 100% throughput to drive the envisioned break-even point.
Supply: Over Capacity Can Negatively Impact The Semiconductor Manufacturing Ecosystem.
ROI: Market Demand Can Impact The Return On Investment.
Negative market demand while the new FABs are coming up is not the best scenario. It raises questions about the ROI and also puts the investment at risk. While the FABs have already done the groundwork to mitigate such a situation. In many cases, it is not possible to eliminate such risks.
The benefits of the new semiconductor FAB are positive only as it not only drives more capacity but also brings a new type of semiconductor technology that can benefit the semiconductor industry for the decades to come.
