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A contract chip maker—more commonly called a semiconductor foundry—manufactures chips using designs supplied by outside customers. The customer owns the chip design; the foundry provides the manufacturing capability. This separates chip design from chip production.
What does a contract chip maker do?
A foundry receives a customer’s semiconductor design and fabricates it, typically on silicon wafers. In Samsung Semiconductor’s glossary, a foundry is an outsourcing production company that manufactures semiconductors for external clients. The customer can therefore bring a chip design to production without operating its own production line.
“Contract chip maker” is a plain-language description; semiconductor foundry is the standard industry term. The word “contract” highlights that manufacturing is performed for a customer, rather than describing a particular chip type.
How is a foundry different from a fabless company or an IDM?
| Business role | Main responsibility | Relationship to manufacturing |
|---|---|---|
| Foundry or contract chip maker | Manufactures semiconductors for external customers. | Provides fabrication for designs supplied by clients. |
| Fabless company | Designs semiconductors. | Does not have its own production line and outsources fabrication to foundries. |
| Integrated device manufacturer (IDM) | Plans and manufactures semiconductors. | Controls the process from planning through manufacturing, in Samsung Semiconductor’s simplified distinction. |
These are useful basic categories, not exhaustive descriptions of every company. The central distinction is whether a business manufactures customers’ designs, designs chips without its own production line, or combines planning and manufacturing.
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What is an example of a contract chip maker?
Taiwan Semiconductor Manufacturing Company (TSMC) is a documented example of a pure-play foundry. In its 2024 annual report, TSMC says it focuses exclusively on manufacturing customers’ products and does not design, manufacture, or market semiconductor products under its own name. The report describes the company as having pioneered the pure-play foundry model.
TSMC reported that in 2024 it manufactured 11,878 different products using 288 distinct technologies for 522 customers. Those are TSMC’s company-reported figures for that year, not totals for the foundry industry.
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Does a foundry provide services beyond chip fabrication?
Wafer fabrication is the core service, but the exact service menu varies by provider. TSMC lists backend services, advanced packaging, mask services, and eFoundry web applications among its offerings. Those are TSMC-specific examples, not services guaranteed to be available from every contract chip maker.
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What to check when comparing foundries
- Whose designs are manufactured? A foundry’s defining role is to fabricate products for external customers.
- Does the company also design chips? The foundry and fabless labels describe different roles, although real company activities can be more nuanced than the basic distinction.
- What services are included? Check whether the provider’s stated offering covers only wafer fabrication or also names services such as packaging or mask services.
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