Semiconductor pure-play foundry has been proven to be a successful business model since its introduction in 1987 by Taiwan Semiconductor Manufacturing Co. (TSMC). This type of business model leads to that vertical disintegration of the semiconductor business is possible, hence expedites the fast business growth of fabless integrated circuit (IC) design, CAD tools/IP, IC design service, and IC assembly and testing subcontract service. Vertical disintegration normally will increase the overall transaction cost of the whole industry. But the value generated by pure-play foundry players and captured by fabless IC company can offset the transaction cost increased. Therefore the fabless IC company could be competitive and maintain a sustainable growth in the past two decades. Pure-play foundry generates value by the following strategies. 1.Make a strong partnership with fabless IC design company by not having its own IC products. So it will not be a rival of fabless IC design company. It also provide total solution service to fabless IC design company including design service, design intellectual properties (IP), design tools and IC assembly and testing service. 2.Maintain a technology leadership to provide the most advanced process and device technology to fabless IC design company not only for time to market but also for time to volume. For the mainstream technology, differentiate technology and help maintain customer’s market share and profitability. 3.Sustain the manufacturing excellence. Provide customer with high quality, high yield rate, short cycle time, low cost and sufficient capacity. The cost benefits of pure-play foundry major come from the following two factors. 1.Extended Fab lifetime by running diverse products from multiple market segment and multiple company. Therefore the depreciation is reduced remarkably. 2.With huge scale of economics and fast learning curve, production yield rate ramped quickly and total production cost decreased substantially.