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Wafer supply bottleneck drives longer-term contracts

As supply bottlenecks for AI semiconductors spread from high-bandwidth memory and substrates to silicon wafers, long-term supply agreement terms have extended to as long as 10 years from a standard 3 to 5 years. Wafer capacity expansion has stalled while advanced packaging has increased wafer consumption. Micron provided $500 million in strategic financing to GlobalWafers and signed a 10-year agreement. South Korean memory makers are also shifting toward 5-year-plus lock-in and capacity-linked contracts.