AMD will purchase a third of the wafers it originally agreed to under a revised wafer supply agreement with wafer manufacturer Globalfoundries.

AMD was set to buy $500 million worth of wafers from Globalfoundries, but a “choppy demand environment” caused the company to rethink this order pushing it down to $115 million.

“Today’s announcement demonstrates that the long-term strategic partnership between AMD and Globalfoundries continues to benefit both companies,” said Rory Read, AMD’s president at CEO, in a statement. ” The newly amended agreement is another step we are taking to further strengthen our relationship with Globalfoundries as well as AMD’s financial foundation.”

To amend this contract, AMD will be paying a penalty of $320 million — $80 million to be paid by December 28, 2012, $40 million before April 1, 2013 as well as a $200 million promissory note due on December 31, 2013.

This amended contract is a product of AMD’s dire financial straights. The company saw its revenue drop to $1.27 billion in the last quarter from $1.69 billion in the same quarter last year, and reported a net loss of $157 million from a net profit of $97 million last year.