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Semiconductor accounting: commitments, prepayments, and inventory
How to read manufacturing exposure without turning every obligation into imaginary CapEx.
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.
A stock is not a flow
An ending commitment balance, an annual capital-spending line, and a point-in-time PP&E balance can be compared for scale only when the chart labels their different economic meanings.
Cash timing varies
A purchase commitment is not automatically cash already paid. A prepayment is not automatically a factory asset. Inventory can support resilience while also creating write-down risk.
Use the complete dashboard
The Shadow Capital Tracker keeps reported CapEx, PP&E, commitments, near-term amounts, prepayments, inventory, charges, guarantees, and non-manufacturing categories distinct.
Evidence
Claims supporting this explainer
The old CapEx-only proof of fabless capital efficiency is incomplete because material capacity exposure can appear as commitments, prepayments, inventory, guarantees, and investments.
Caveat. Do not state that every fabless company is more capital-intensive than every IDM.
SEC MD&A rules require discussion of material cash requirements and recognize that off-balance-sheet commitments can materially affect financial condition.
Caveat. Paraphrase, not a legal opinion.
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.