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In the
electronics industry
The electronics industry is the economic sector that produces electronic devices. It emerged in the 20th century and is today one of the largest global industries. Contemporary society uses a vast array of electronic devices built-in automated or ...
, a second source is a company that is licensed to manufacture and sell components originally designed by another company (the first source).
It is common for engineers and purchasers to avoid components that are only available from a single source, to avoid the risk that a problem with the supplier would prevent a popular and profitable product from being manufactured. For simple components such as resistors and transistors, this is not usually an issue, but for complex integrated circuit
An integrated circuit or monolithic integrated circuit (also referred to as an IC, a chip, or a microchip) is a set of electronic circuits on one small flat piece (or "chip") of semiconductor material, usually silicon. Large numbers of tiny ...
s, vendors often react by licensing one or more other companies to manufacture and sell the same parts as second sources. While the details of such licenses are usually confidential, they often involve cross-licensing A cross-licensing agreement is a contract between two or more parties where each party grants rights to their intellectual property to the other parties.
Patent law
In patent law, a cross-licensing agreement is an agreement according to which two ...
, so that each company also obtains the right to manufacture and sell parts designed by the other.
Examples
MOS Technology
MOS Technology, Inc. ("MOS" being short for Metal Oxide Semiconductor), later known as CSG (Commodore Semiconductor Group) and GMT Microelectronics, was a semiconductor design and fabrication company based in Audubon, Pennsylvania. It is mos ...
licensed Rockwell and Synertek
Synertek, Inc. was an American semiconductor manufacturer founded in 1973. The initial staff consisted of Bob Schreiner (the CEO), Dan Floyd, Jack Balletto, and Gunnar Wetlesen and Zvi Grinfas. Schreiner, Floyd, Balletto and Wetlesen were all forme ...
to second-source the 6502 microprocessor and its support components.
Intel
Intel Corporation is an American multinational corporation and technology company headquartered in Santa Clara, California. It is the world's largest semiconductor chip manufacturer by revenue, and is one of the developers of the x86 ser ...
licensed AMD to second-source Intel microprocessors such as the 8086
The 8086 (also called iAPX 86) is a 16-bit microprocessor chip designed by Intel between early 1976 and June 8, 1978, when it was released. The Intel 8088, released July 1, 1979, is a slightly modified chip with an external 8-bit data bus (allo ...
and its related support components. This second-source agreement is particularly famous for leading to much litigation between the two parties. The agreement gave AMD the rights to second-source later Intel parts, but Intel refused to provide the mask
A mask is an object normally worn on the face, typically for protection, disguise, performance, or entertainment and often they have been employed for rituals and rights. Masks have been used since antiquity for both ceremonial and pra ...
s for the 386 to AMD. AMD reverse-engineered
Reverse engineering (also known as backwards engineering or back engineering) is a process or method through which one attempts to understand through deductive reasoning how a previously made device, process, system, or piece of software accompli ...
the 386, and Intel then claimed that AMD's license to the 386 microcode
In processor design, microcode (μcode) is a technique that interposes a layer of computer organization between the central processing unit (CPU) hardware and the programmer-visible instruction set architecture of a computer. Microcode is a la ...
only allowed AMD to "use" the microcode but not to sell products incorporating it. The courts eventually decided in favor of AMD.Michael J. Lennon, ''Drafting technology patent license agreements'', Aspen Publishers Online, 1999 , Appendix 4C ''The AMD-Intel, AMD-Fujitsu Cross-License and Joint Venture Agreement''
References