AMD strikes $1.2B wafer supply deal with Globalfoundries

|By:, SA News Editor

Under the terms of an amended supply agreement with foundry partner Globalfoundries, AMD expects to buy $1.2B worth of wafers in 2014. The chipmaker says the deal doesn't impact its 2014 financial/gross margin targets.

Back in Dec. 2012, AMD agreed to make a $320M termination payment to Globalfoundries to downsize a supply agreement on account of weaker-than-expected sales.

AMD disclosed on its Q4 CC (transcript) it bought only $960M worth of wafers from Globalfoundries in 2013, less than the $1.15B it expected to purchase via the amended deal. But the company added there were "no penalties associated with this reduction," and that it's aiming to "manage inventory flat to down year over year."