v. 1. To produce chips from a design that may have been created by someone at another company. Fabbing chips based on the designs of others is the activity of a silicon foundry. To a hacker, 'fab' is practically never short for 'fabulous'.
2. 'fab line': the production system (lithography, diffusion, etching, etc.) for chips at a chip manufacturer. Different 'fab lines' are run with different process parameters, die sizes, or technologies, or simply to provide more manufacturing volume.