Silicon AnalyticaGlossary · Business & metrics
What is fab utilization?
Fab utilization is the share of a chip factory’s production capacity that is actually used over a period. It is usually expressed as a percentage of the wafers the fab could process.
Why it matters for investors
Chip factories have high fixed costs, so utilization strongly affects profitability: when it falls, the same depreciation and staff costs are spread over fewer wafers and margins drop.
Foundries and memory makers often comment on utilization in earnings calls, and changes in it can signal shifts in customer demand before they show up in revenue.
Key companies
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General educational explanation. Information only, not investment advice.