The first shift in this space happened when some companies found they had excess capacity in their own fabs because an economically large semiconductor foundry might turn out to be larger than their own needs for their own product lines. Correspondingly, other companies may have the opposite problem: they didn’t build a big enough foundry, or they were late constructing it, and they had more demand than supply.

Semiconductor companies would buy and sell wafers from each other to even out their capacity needs. This became known as the foundry business, analogous to a steel foundry. In a similar way, semiconductor companies with shortages would take their designs to other semiconductor companies with surplus capacity (often even competitors) and have them manufactured for them.