Semiconductors are extremely expensive to manufacture because of their specialized design. Therefore, companies manufacturing semiconductors do so in sufficiently large quantities to recover both the design and production costs.

Because of the large production costs, semiconductors are usually produced in a single large batch that is enough to meet the market demand at that given time. To reduce the risks to customers, and to help sell chips, chip suppliers often make legal agreements with other suppliers to provide a backup source for chips of a given design.

When the chips are purchased as components to be built into some product, the costs of any changes to the final product makes them very expensive to substitute. If any component can not be acquired, large costs are incurred while seeking a suitable replacement. It is thus natural that a significant portion of the design cost of a new product goes into making sure that all of the components will be available in a timely and cost effective manner. Therefore, companies are constantly looking for chips with second sources.

A second source helps to insure availability of a given component. It also helps in another way which is not quite as obvious, troubleshooting. If a given design is found to work well with one suppliers chips, it becomes possible to track down exactly where the fault lies, saving time and energy.

As the semiconductor industry matures, vendors have started to recognized the benefits of second sources, and the value they give to their customers.