In the

electronics industry The electronics industry is the industry (economics), industry 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 that ar ...

, 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 seek components that are available from multiple sources, to avoid the risk that a problem with one supplier would prevent a 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 (IC), also known as a microchip or simply chip, is a set of electronic circuits, consisting of various electronic components (such as transistors, resistors, and capacitors) and their interconnections. These components a ...

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. In the early TTL device period wafers were smaller so production was limited. More production lead to lower prices and new designs rapidly emerged.

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 ...

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, and Delaware General Corporation Law, incorporated in Delaware. Intel designs, manufactures, and sells computer compo ...

licensed

AMD Advanced Micro Devices, Inc. (AMD) is an American multinational corporation and technology company headquartered in Santa Clara, California and maintains significant operations in Austin, Texas. AMD is a hardware and fabless company that de ...

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 employed for rituals and rites. Masks have been used since antiquity for both ceremonial and practical purposes, ...

s for the

386 __NOTOC__ Year 386 (Roman numerals, CCCLXXXVI) was a common year starting on Thursday of the Julian calendar. At the time, it was known as the Year of the Consulship of Honorius and Euodius (or, less frequently, year 1139 ''Ab urbe condita''). ...

to AMD. AMD reverse-engineered the 386, and Intel then claimed that AMD's license to the 386

microcode In processor design, microcode serves as an intermediary layer situated between the central processing unit (CPU) hardware and the programmer-visible instruction set architecture of a computer. It consists of a set of hardware-level instructions ...

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

Electronics manufacturing {{Business-stub