AMD Updates Wafer Supply Agreement with Globalfoundries

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electronicdesign.com, Feb. 06, 2019 – 

For decades, Advanced Micro Devices, the world's second largest maker of computer and graphics chips, manufactured all the chips it designed. But in 2008, AMD divested from its manufacturing operations, forming Globalfoundries in the process. As part of the deal, the Silicon Valley company arranged a wafer supply agreement with Globalfoundries, which has remained in place despite going through some changes.

AMD recently said that it had updated the deal with Globalfoundries to reflect their changing strategies. The deal stipulates the volume and price of wafers that AMD will purchase from its former manufacturing unit through 2021. AMD is forced to pay Globalfoundries a portion of the difference any year it falls short of its purchase agreement. It also allows AMD to work with other companies at the 7-nanometer node.

Last year, Globalfoundries halted the development of its 7-nanometer node. The second largest contract manufacturer of chips said that it would not have had enough customers to recoup the investment in the 7-nanometer node, which had grown to billions of dollars. "We are shifting our resources and focus by doubling down on our investments in differentiated technologies," CEO Thomas Caulfield said in August.

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