AMD Changes Wafer Supply Agreement With GLOBALFOUNDRIES
AMD announced that it has entered into a long-term amendment to its Wafer Supply Agreement (WSA) with GLOBALFOUNDRIES Inc. (GF) for the period from Jan. 1, 2016 to Dec. 31, 2020.
"The five-year amendment further strengthens our strategic manufacturing relationship with GLOBALFOUNDRIES while providing AMD with increased flexibility to build our high-performance product roadmap with additional foundries in the 14 nm and 7 nm technology nodes," said Dr. Lisa Su, AMD president and CEO. "Our goal is for AMD to have continued access to leading-edge foundry process technologies enabling us to build multiple generations of great products for years to come."
GLOBALFOUNDRIES' Fab 8 in Malta, N.Y. is playing a significant role in providing leading-edge capacity for AMD's graphics and processor products, including the recently launched AMD Radeon Polaris GPUs and upcoming "Zen"-based processors.
- Covers a 5-year period, spanning from calendar year 2016 through 2020;
- Establishes a comprehensive framework for technology collaboration between AMD and GF for the 7nm technology node, building on the success of the 14nm node;
- Provides AMD with the flexibility to manufacture certain products with another wafer foundry;
- Sets annual wafer purchase targets from 2016 through the end of 2020, fixed wafer prices for 2016, and a framework for yearly wafer pricing.
In partial consideration for these rights, AMD will:
- Make a $100 million cash payment to GF, paid in installments beginning in Q4 2016 through Q3 2017.
- Make quarterly payments to GF beginning in 2017 based on the volume of certain wafers purchased from another wafer foundry.
- Grant to West Coast Hitech L.P., a wholly-owned subsidiary of the Mubadala Development Company PJSC, a warrant to purchase 75 million shares of AMD common stock at a purchase price of $5.98 per share. The warrant may be exercised in whole or in part prior to February 29, 2020. The warrant is only exercisable to the extent that Mubadala or its subsidiaries do not beneficially own, either directly or indirectly, an aggregate of more than 19.99 percent of AMD's outstanding capital stock after the exercise.
AMD expects to record a one-time accounting charge in the third quarter of 2016 of approximately $335 million comprised of the $100 million payment and the $235 million value of the warrant.
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Clock speed is more about cell libraries and path optimization then the process itself.
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This is truly a big deal..in my humble opinion it means AMD is coming back big time, Mubadala owner of Global-foundries already controls 18% of AMD and now a warrant to purchase 75 million shares of AMD. sure there is this " warrant is only exercisable to the extent that Mubadala or its subsidiaries do not beneficially own, either directly or indirectly, an aggregate of more than 19.99 percent of AMD's outstanding capital stock after the exercise." guess it got to do with preventing Abu Dhabi government from taking control over AMD, again just speculations. but who knows maybe we will witness a re-merge between AMD and GF. agian just me thinking out loud

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I never seen so much hype,benchmarks and review of unpublished products like AMD ZEN. These days everyone talk about killer performance,8,16,32 cores,low TDP and yet they didn't earn a single cent from it or sell a single one.
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I agree. No question that it means AMD is so confident of a severe spike in demand for its CPUs and GPUs that it wants to ensure it has sufficient FAB capacity for the next five years--enough to pay for the guarantees in capacity from GF. With respect to buying GF back, that's always possible but I think so long as a FABless arrangement is working it may be beneficial for both parties, here. AMD is doing everything right, now, thanks to its fantastic CEO...! She understands the market, understands AMD's strengths and Intel and nVidia's weaknesses. She is the first AMD CEO who hasn't tried to run AMD like Motorola was run in its halcyon days...


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I guess the 14nm process must be working as intended, despite Polaris's low clocks, if they are already committed to 7nm. This ought to be good news for Zen, whose clocking capability is still publicly unknown.