By Bolaji Ojo
What’s at stake?
Semiconductor inventories have ballooned among chipmakers, foundries, and component distributors despite complaints of severe shortages. Most available parts have been prepaid and accounted for, however, and therefore cannot be released to just any prospective buyers, putting a further squeeze on supply chains. If the situation persists, the ongoing shortages will be indefinitely prolonged.
With the current supply shortages serving as cover and justification for their actions, chipmakers have been asking for and receiving billions of dollars as prepayment for components, splitting purchasers into two camps: the deep-pocketed enterprises that can afford to pay a premium for products and services, and the hardscrabble OEMs and fabless chip vendors that must scramble for leftover supplies and foundry manufacturing space, which they may only be able to secure by paying much higher prices.
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