Originally posted by Kunzite Bigger wafers are more economical and don't generate higher defects rates AFAIK, but yes, the fab must be able to handle them.
This actually isn't really true. The cost of significantly more capital necessary to develop, source and install 300mm wafer fab, the mask and the lens to burn product, as well as to build the specialized building around them (vibration damped entire FLOORS, for heaven's sake) can negate all the theoretical benefit of cutting more sensors from the finished wafer.
Further, there is a yield limit. If there is a constant "known" quantity of defective areas per unit of wafer measure, then the larger the sensor, the higher the likelihood any one sensor will contain a defecticve area. That fact is a significant limiter to rapid price reduction for FF sensors as volume ramps. They simply have to throw too many of them away compared the faulty / working ratio for smaller sensors.
This may not actually be true, but I have read that the Japan earthquake damaged fab plants enough (knocked fab tables and floors off "true") that in some cases, even though capital costs were not fully recovered, after insurance was collected it made business sense to build new fabs for larger finished product than to restore the old technology. Thus the potential supply of FF sensors has increased sooner than might have been directed by the normal capital-recovery cycle.