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AMD Scales Down Global Foundries Order  

Hardware Canucks > News > CPU/Chipset News > AMD Scales Down Global Foundries Order
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Posted by Sam Reynolds — December 7th, 2012, 12:36 PM

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.


Tags: AMD

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Comments (8)

  1. mcbot says:
    December 7, 2012 at 1:41 pm

    One more nail in the coffin…too bad, I really liked AMD at one time.

  2. mcbot says:
    December 7, 2012 at 1:42 pm

    also, 320 million to get out of it…ouch.

  3. joe says:
    December 7, 2012 at 1:49 pm

    remember if amd shit the bed get ready for overprice as fuck video cards just saying

  4. M4ENY says:
    December 7, 2012 at 1:58 pm

    AMD still has to pay total of 435 million dollars ( including penalty) . I think they should have just bought all of the $500 million dollar order.

  5. M4ENY says:
    December 7, 2012 at 1:58 pm

    Lets hope that wont happen

  6. Hanakoikezawa says:
    December 7, 2012 at 2:49 pm

    I don’t know why I keep reading these articles, they just continue to make me sad :(

  7. anon says:
    December 7, 2012 at 2:58 pm

    This doesn’t make sense. Why pay a $320 million penalty and get nothing for it, when you can pay the original amount ($500 million), and get that in product which you can be sold?

  8. mcbot says:
    December 7, 2012 at 3:19 pm

    i believe 200 million of that payment is a promise for future purchases..so the penalty is really 120 million…which still sucks….more than double price on what they actually bought.


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