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GLOBALFOUNDRIES, AMD Agree to Negotiated Wafer Price Mechanism for 2012

Published on March 6, 2012 at 4:26 AM

By Cameron Chai

AMD has amended its wafer supply agreement (WSA) with GLOBALFOUNDRIES. In this deal, the two companies have settled with an agreeable wafer price mechanism for the fiscal year 2012.

As part of the agreement, GLOBALFOUNDRIES will acquire AMD’s remaining stake in GLOBALFOUNDRIES. The two companies have established a structure for wafer pricing in the fiscal year 2013. They have also agreed to surrender the additional 2012 quarterly payment obligations of AMD mentioned in the 2011 amendment.

According to the deal, GLOBALFOUNDRIES surrendered the exclusivity pact for AMD to produce some 28 nm APU products at the facilities of GLOBALFOUNDRIES over a specific period. Consequently, GLOBALFOUNDRIES will receive $425 million in cash from AMD, of which $150 million is being received on March 5, 2012, $50 million will be received by July 2, 2012, and another $50 million by October 2, 2012. The remaining $175 million will be received in the Q1 of 2013.

Moreover, GLOBALFOUNDRIES received a promissory note from AMD for the payments due in October 2, 2012 and Q1 of 2013. AMD’s Chief Executive Officer, Rory Read commented that the amended wafer supply deal shows that AMD and GLOBALFOUNDRIES continue to serve as long-term strategic business partners. The company achieved significant progress in 2011 to reinforce the relationship between the two companies, and the company is happy about GLOBALFOUNDRIES' recent performance in fulfilling AMD’s delivery needs across its product line.

Source: http://www.amd.com

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