Advanced Micro Devices (AMD) has expanded its wafer supply agreement with pure-play foundry GlobalFoundries Inc. (GF) that will give the chipmaker access to leading-edge manufacturing processes through 2020.
Under the terms of the agreement, GF’s Fab 8 in Malta, NY, will provide capacity for AMD’s graphics and processor products, including the recently launched AMD Radeon Polaris GPUs and upcoming “Zen”-based processors. The deal will provide AMD with increased manufacturing for its high-performance product roadmap as well as access to 14 nm and 7 nm technology nodes.
The agreement sets annual wafer purchase targets from 2016 through the end of 2020, fixed wafer prices for 2016 and a framework for yearly wafer pricing. Meanwhile AMD will make a $100 million cash payment to GF beginning in 2017 based on the volume of certain wafers purchased from another wafer foundry. AMD will also issue a warrant to West Coast Hitech LP, a wholly owned subsidiary of the Mubadala Development Company PJSC, to purchase 75 million shares of AMD common stock at a purchase price of $5.98 per share.
AMD says it will record a one-time accounting charge in the third quarter of this year of about $335 million, composed of the $100 million payment to GF and the $235 million value of the West Coast Hitech warrant.
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