Pandemic demand, smartphone shuffle put squeeze on global chipmakers

Chip prices are rising, leading to bumper profits for third-party manufacturers. PHOTO: REUTERS
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(CAIXIN GLOBAL) - High-tech veteran Guo Ming first noticed that change might be brewing in the highly cyclical sector for microchips in last year's third quarter. His company, a midsize Chinese manufacturer of display driver integrated circuits, was a typical industry player, designing its own chips and using third-party partners to manufacture them.

Realising supplies were tightening, he quickly negotiated with his company's Taiwan partner to secure the manufacturing capacity he would need through 2021. But the partner also saw what was happening and used the situation to its advantage.

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