Yield

If 100 chips come from one wafer and only 80 are sound, the yield is 80%. The circuits are so thin that a single speck of dust or a tiny vibration can cause a defect. Through the many steps of the process, if even one goes wrong, that chip cannot be used.

A new process starts with a low yield, and it rises as experience builds up. When the yield is low, there are fewer chips to sell for the same money spent, so prices rise and deliveries slip. Companies rarely reveal their yields, so the numbers in articles are often estimates made from outside.

Say you bake ten pancakes, two burn, and you can only sell the other eight. The yield is 80%. You paid for ten pancakes' worth of batter, so the more that burn, the bigger the loss.

News that the yield has improved, or that yield is holding a company back, tells you about a chip company's skill and profit. It also decides which factory wins a big order.