A semiconductor fabrication unit, commonly called a "fab" or a foundry, is a highly specialized manufacturing plant (institution) where integrated circuits (ICs), such as microprocessors and memory chips, are produced. The core of a fab is the clean room, a strictly controlled environment that eliminates dust, vibration, temperature, and humidity fluctuations, as even a single speck can ruin a microcircuit with nanoscale features.
The need for fabs arose from the invention of the transistor in 1947 by John Bardeen and Walter Brattain, which solved the problem of bulky, power-hungry vacuum tubes. The subsequent development of the integrated circuit in 1959 by Jack Kilby and Robert Noyce, and the planar process by Jean Hoerni, made mass production possible.
The fabrication process, which can take up to 15 weeks for advanced chips, involves hundreds of steps on a silicon wafer. Key mechanisms include Deposition, where thin films are applied; Photolithography, which uses light and a mask to print the circuit pattern; Etching, which removes unwanted material; and Ion Implantation (Doping), which embeds impurities to tune the silicon's electrical properties and create transistors. The final step is Packaging, where the wafer is separated into individual chips.
In India, the concept is directly connected to the India Semiconductor Mission (ISM), a government scheme with an initial outlay of ₹76,000 crore (for ISM 1.0) to build a domestic semiconductor ecosystem. The scheme for setting up Semiconductor Fabs in India was modified on October 4, 2022, and its guidelines were amended on September 8, 2025, to offer fiscal support of up to 50% of the project cost for silicon CMOS-based fabs. Recently, the India Semiconductor Mission 2.0 was announced in the Union Budget 2026-27 with a proposed outlay of ₹1.25 lakh crore, a significant increase from the initial ISM. As of June 30, 2026, 12 semiconductor manufacturing projects, including one semiconductor fabrication unit, have been approved under the ISM.