For example, in the sentence "Semiconductor fabrication is a $100 billion industry.", what exactly is being said?
Typically when those numbers are mentioned it is with regards to the "Total Addressable Market", or TAM, and not just all the current revenue for businesses added up. Total Addressable Market is all the possible revenue opportunity for, in this case, Semiconductor fabrication. Wikipedia's definition is pretty good
Often institutional investors will reference TAM to help them understand growth possibilities for companies and industries.
There are a few different possible meanings here.
For example, let's take "Software Industry" from Wikipedia:
According to market researcher DataMonitor, the size of the worldwide software industry in 2008 was US$303.8 billion, an increase of 6.5% compared to 2007. Americans account for 42.6% of the global software market's value.
Which would imply the value is the sum of the global software market. This could be sum of revenues of software companies or market capitalization of such companies for a couple of possible ideas. Generally the idea is to get the scale of how big is a market. For example, consider the size of the automotive market in the US compared to how many people are buying horse-drawn carriages.
Either revenues (sales) or assets (assets under management) or size of their portfolios (e.g. loan portfolio, insurance policy portfolios). it would be rarely market cap, unless it was specifically noted.