> The car manufacturers would surely just buy their way into the front of the line, if it was just this. Chips are a fraction of a car’s value and the cost of stopping car production lines must be a lot higher than buying slots in s chip production facility.
There is no excess capacity at fabs, so if someone buys their way to the front of the line, the fab is going to miss delivery dates on all the contracts it currently has.
Fabs do have that option, but it's going to cost an enormous amount. Automakers have to pay enough that the fab makes enough money to compensate for the loss of reputation (it won't be a secret that they let someone skip the line), even after subtracting any contractual fees brought about by missing delivery dates on other contracts. That's why you aren't paying slightly more, you're paying orders of magnitude more. I would also be unsurprised if everyone who can get in an order is paying a little extra to raise the contractual fees for missing a delivery date.
A single jumped order can make 100 other contracts deliver late. That's a lot of fees.
There is no excess capacity at fabs, so if someone buys their way to the front of the line, the fab is going to miss delivery dates on all the contracts it currently has.
Fabs do have that option, but it's going to cost an enormous amount. Automakers have to pay enough that the fab makes enough money to compensate for the loss of reputation (it won't be a secret that they let someone skip the line), even after subtracting any contractual fees brought about by missing delivery dates on other contracts. That's why you aren't paying slightly more, you're paying orders of magnitude more. I would also be unsurprised if everyone who can get in an order is paying a little extra to raise the contractual fees for missing a delivery date.
A single jumped order can make 100 other contracts deliver late. That's a lot of fees.