SOI (silicon-on-insulator) is a fabrication technique where transistors are built on a thin silicon layer resting on an insulating layer, allowing for higher speed, lower power consumption, and easier fabrication compared to traditional bulk silicon. The main types of SOI are partially depleted SOI (PD-SOI) and fully depleted SOI (FD-SOI). SOI offers advantages like reduced parasitic capacitance but also faces limitations such as higher manufacturing costs and floating body effects. SOI is increasingly being used in applications like smartphones, tablets, and automotive systems.