The lack of chips has led to price increases, and chip manufacturers have signed long-term supply agreements

The lack of chips has led to price increases, and chip manufacturers have signed long-term supply agreements

Business password December 24 (Shao Feng) news, if the hottest investment word in 2021, it is necessary to count chips. Because of the suspension of chip factories in Southeast Asia, global technology companies have successively experienced the problem of core shortage. There are also many car companies that directly stop production or shut down production lines because of the lack of chips. 4S shops have the problem of no cars to sell, used cars are more expensive than new cars, and the market is upside down.

The lack of chips has led to the problem of price increases, and after the price increase problem, manufacturers have signed long-term supply treaties with chip manufacturers in order to avoid the risk of price increases. According to the previous judgment, after chip manufacturers have signed long contracts, they will be transmitted to chip raw material suppliers, and they also intend to control prices through long-term agreements.

AMD will purchase approximately $2.1 billion in wafers from GlobalFoundries between 2022 and 2025 through a revised agreement. Wafers are large-sized silicon wafers used to make computer chips. This is also the basis of chip production, if this is not, the chip will not be able to produce.

It is understood that GF was created when AMD spun off the chip factory in 2009, and has since supplied chips to AMD. But GF decided in 2018 to abandon the pursuit of leading chip manufacturing technology. AMD turned to TSMC to supply it with chiplets, the most important components of the processor. Even though TSMC has become its main supplier, AMD still relies on some of the components GF supplies to integrate chips.

Through AMD's purchase agreement, it is not difficult to see that chip companies have recently begun to focus on signing agreements with upstream material companies after signing long-term supply agreements to ensure that their costs will not rise in the future.

You should know that the price of chips has risen many times this year, and there is a black market. In the past, a chip of a few dollars was speculated 40 times higher. But in this way, there are still a large number of car companies hard to purchase, although this part of the cost has not been transmitted to the hands of consumers, but do not rule out the possibility of future price increases.

A few days ago, malaysia's recent continuous heavy rains have led to the flooding and shutdown of two local plants of Nihon Dempa Kogyo (NDK), a major global quartz module manufacturer, and it is estimated that it will take some time to resume work. This will also indicate that the price of chips will rise in the future, and the problem of chip shortage in a short period of time will still be difficult to solve.