Cloud manufacturing (CMfg) is a new-generation service-oriented networked manufacturing model that provides distributed users centralized managed manufacturing resources, ability, and services. CMfg is applied here to a semiconductor manufacturing factory. Benefits are classified into five aspects: cost savings, efficiency, additional data analysis capabilities, flexibility, and closer partner relationships. A strength, weakness, opportunity, and threat (SWOT) analysis is done which guides a semiconductor manufacturer in planning CMfg implementation projects. Simulation of a wafer fabrication factory (wafer fab) is used as an example. Several CMfg services are proposed for assisting the fab simulation activities through the collaboration of cloud service providers, software vendors, equipment suppliers, and the wafer fab. The connection with the competitiveness and sustainability of a wafer fab is also stressed.