Advanced Micro Devices (AMD) has restructured its wafer supply agreement (WSA) with GlobalFoundries in a deal that will see a one-time charge of $703m in the first quarter of 2012 for AMD.
GlobalFoundries waived the exclusivity arrangement for AMD to manufacture certain 28nm APU products at the company for a specified period.
AMD chief executive officer Rory Read said the amended wafer supply agreement demonstrates that the company and GlobalFoundries remain committed as long-term strategic business partners.
The deal includes $425m cash payment by AMD to GlobalFoundries, while the remainder will be a non-cash charge.
AMD will initially to pay $150m on March 5, 2012, and $50m will be paid by July 2, $50m by October 2 and $175m in the first quarter of 2013.
As per the amended agreement, AMD also agreed to transfer its remaining interest in GlobalFoundries to the latter.
The companies said they have established a wafer price mechanism with negotiated prices based on a take or pay arrangement in 2012 and established a framework for wafer pricing in 2013.
Bothe the parties agreed that AMD’s additional 2012 quarterly payment obligations specified in the 2011 amendment will be waived.
