Merchant foundries, on the other hand, find work from the worldwide pool of fabless companies, through careful scheduling, pricing, and contracting, keep their plants in full use.
The first pure play semiconductor company is the Taiwan Semiconductor Manufacturing Corporation founded by Morris Chang, a spin-off of the government Industrial Technology Research Institute, which split its design and fabrication divisions in 1987,[6] a model advocated for by Carver Mead in the U.S., but deemed too costly to pursue.
A factory with excess capacity during slow periods could also run MOSIS designs to avoid having expensive capital equipment stand idle.
Under-use of an expensive manufacturing plant could lead to the financial ruin of the owner, so selling surplus wafer capacity was a way to maximize the fab's use.
Foundries concerned with protecting what they considered trade secrets of their methodologies might only be willing to release data to designers after an onerous nondisclosure procedure.
In 1987, the world's first dedicated merchant foundry opened its doors: Taiwan Semiconductor Manufacturing Company (TSMC).
[9] The distinction of 'dedicated' is in reference to the typical merchant foundry of the era, whose primary business activity was building and selling of its own IC-products.
Many merchant foundries have entered into joint ventures with their competitors in an effort to split research and design expenditures and fab-maintenance expenses.
However, the data including any procedure, process system, method of operation or concept may be sold to a competitor, who may save months or years of tedious reverse engineering.