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What does the delivery window negotiation/"allowance" look like with a Foundry?

Xebec

Active member
I imagine that when an ASIC designer contracts with someone like TSMC to produce something on an advanced node -- there's contractual allowance for schedule changes. For example, Intel is getting ready to launch their ARC graphics cards on TSMC 6nm, and it *appears* that the cards may have slipped a quarter or more from their original "planned" launch dates. My question is - what happens when the ASIC designer that has booked TSMC capacity needs production to start substantially later than planned? Conversely, what happens contractually when the reverse is true, if a foundry slips it's schedule or can't reach sufficient yields in time? Are these contracts generally broad enough to allow for "wide bars of error", and only if those bars are exceeded are there modifications to the $ portion or obligations of the contract available?

I know this is a pretty open ended question - I'm just looking for some "typicals" here so I can understand better how this works.

Thanks!
 

hist78

Well-known member
I imagine that when an ASIC designer contracts with someone like TSMC to produce something on an advanced node -- there's contractual allowance for schedule changes. For example, Intel is getting ready to launch their ARC graphics cards on TSMC 6nm, and it *appears* that the cards may have slipped a quarter or more from their original "planned" launch dates. My question is - what happens when the ASIC designer that has booked TSMC capacity needs production to start substantially later than planned? Conversely, what happens contractually when the reverse is true, if a foundry slips it's schedule or can't reach sufficient yields in time? Are these contracts generally broad enough to allow for "wide bars of error", and only if those bars are exceeded are there modifications to the $ portion or obligations of the contract available?

I know this is a pretty open ended question - I'm just looking for some "typicals" here so I can understand better how this works.

Thanks!
To extend your question a little bit. Did those TSMC customers pay hefty penalties when they cancelled their automobile related orders last year due to Covid-19?
 
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