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How semiconductor capacity is bought
A practical taxonomy for reservations, firm purchases, prepayments, guarantees, investments, and anchor agreements.
Re-sourced edition. This explainer adapts the site’s educational material to the current claim registry. Material numbers appear only in the governed evidence cards below.
Start with the contract form
Capacity can be secured through reservations, firm inventory purchases, supplier prepayments, facility guarantees, strategic investments, or customer-backed expansion. Each form creates different timing, cancellation, accounting, and residual-value outcomes.
Ask who owns the asset
An anchor customer may de-risk a supplier’s expansion without receiving the factory. A prepayment can improve allocation without becoming PP&E. A long-term agreement can create control without transferring title.
Read the downside clause
The useful diligence questions are duration, firmness, remedies, matching customer demand, portability, and what happens when regulation or product demand changes.
Evidence
Claims supporting this explainer
Qualcomm disclosed $1.9 billion of advance payments under multi-year capacity purchase commitments in fiscal 2025.
Caveat. Down from $3.0B in fiscal 2024.
Open source
Apple agreed to spend more than $30 billion on Broadcom FBAR filters through 2031.
Registry exception. The supplied registry labels this claim Corroborated but provides one source. Independent corroboration remains pending; the original state is preserved rather than silently rewritten.
Caveat. Long-term supply agreement, not Apple-owned PP&E.
Open source
Broadcom plans to invest $1.5 billion to expand its Fort Collins factory under the Apple agreement.
Registry exception. The supplied registry labels this claim Corroborated but provides one source. Independent corroboration remains pending; the original state is preserved rather than silently rewritten.
Caveat. Customer-backed supplier expansion.
Open source
GM and GlobalFoundries entered a long-term agreement for dedicated U.S. semiconductor capacity.
Registry exception. The supplied registry labels this claim Corroborated but provides one source. Independent corroboration remains pending; the original state is preserved rather than silently rewritten.
Caveat. Illustrates vertical integration by contract.
Open source
Purchase commitments are not automatically prepaid cash and should not be treated as economically identical to fab construction.
Caveat. Core caveat for all charts.