Silicon AnalyticaGlossary · Business & metrics
What is a fabless chip company?
A fabless company designs and sells chips but outsources their manufacturing to foundries. It concentrates its spending on research, design and software rather than factories.
Why it matters for investors
Without factories, fabless companies usually have fewer fixed assets and can grow quickly when their products succeed. Their gross margins reflect pricing power over the cost of wafers bought from foundries.
They depend on foundry capacity and pricing, and on packaging and test partners, so supply constraints at those suppliers can limit how much they can ship.
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General educational explanation. Information only, not investment advice.