[jbay808]

> Why sell Ford some chip for $1 when they are paying $12 today?

That's a very good point. When you're competing to get your part selected for a new design, you want to sell it cheap, but once they've done all the work of incorporating your part and testing it, you want to make it expensive. It will be interesting to see how this plays out.

[Aurelius3]

I assume they have long term contracts in place for this kind of thing so they can't really get screwed over in that way.

[jbay808]

But aren't those the contracts that they cancelled in 2020?

[kaftoy]

Yes they do. First, they normally buy complete electronics (functional devices with or without software), not just chips. Second, they do have strong contracts, spreading for 3, 4, 5+ years, specifying the volumes for each contracted year and also the piece price (among other details, of course).