Japan and North America, have accounted for most of the wafer fab closures since 2009.  Many of the shuttered wafer fabs had been used for decades and had outlived their useful purpose.

100 fabs have been closed or repurposed in the last decade, says IC Insights.

Figure 1 shows the number of fabs closed by geographic region while Figure 2 shows a distribution of those fabs by wafer size and year.

Figure 1

Consequently, these fabs were closed in favor of much more cost-efficient facilities.  In some cases, the cost of fab ownership became too great of a burden and several companies opted for the fab-lite or fabless business model that outsources manufacturing to a wafer foundry.

Figure 2

IC Insights has identified four additional wafer fabs—one owned by NJR, two at Renesas, and one operated by Analog Devices—that are slated to close in the 2020-21 timeperiod.

Given the skyrocketing cost of new wafer fabs and manufacturing equipment, and as more IC companies transition to a fab-lite or fabless business model, IC Insights anticipates there will be more fab closures in the next few years.

A wave of fab closures came shortly after the Great Recession of 2007-2008 when companies were closely scrutinizing their operating costs.

A decade late, with the Covid-19 virus wreaking havoc on global businesses and greatly impacting the global economy, could another wave of fab closures be in store?