Notwithstanding the advantages related to chip outsourcing, there are numerous challenges. Quality of the chip delivered by the contract manufacturers remains the prime concern. Manufacturers offer virtual inspections and pre-production inspections to ensure quality remains no issue.

Another issue is reliability of the manufacturer even though in communications chips, over 50% of the production is carried out by large well known fabs. Other reasons that chip vendors highlight include the risk of their business models being easily replicated, cross cultural mix and flexibility. But these are largely concerns of startup fabless chip suppliers and/or of those who outsource to small manufacturers.