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've seen much more hype from nVidia, trust me...



BTW, guy, the only reason they haven't "made any money" with ZEN is because it is yet to ship...

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Unfortunately it has more to do with the current miserable lack of competition leading to little development and high prices than everybody really holding their breath for an exciting new AMD product specifically. If the market had had real competition all the time, this hype wouldn't be there. Now we have already lived years under the mercy of a monopoly as far as really worthwhile CPUs go.
It's like all shops and bars selling only a single brand of beer for years, and then suddenly you hear the news another brand will appear soon.
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I would love to get my hands on an affordable and yet high performing processor, with decent temps and low power usage, but chances are AMD will never be able to deliver.
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Bulldozer was far more hyped.
I don't expect miracles now either, it's a bit of an uphill battle for AMD to catch-up.
And what Kaarme said...
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Pardon me if I'm skeptical considering bulldozer's hype and wrong approach towards many weak cores.
At least we know they're working on IPC this time.
Alas I hope I get proven wrong, we need competition badly.
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The FX processors are the only real choice for the <$150 gaming market at this point. The closest Intel CPU to that is the i3-6300, which might be faster than the equivalent priced FX-8350 in some games, but it's a complete suicide to get a dual core CPU at this point.
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Lol
Surprised Zen hasn't gotten one of these yet:
https://www.youtube.com/watch?v=uRYvfhk7xcs
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Lol
Surprised Zen hasn't gotten one of these yet:
https://www.youtube.com/watch?v=uRYvfhk7xcs
We need an amd.exe video

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All has to do with SEC regulations. Under 20% still considered a minority interest and can be treated as such. Anything more, other rules may come into play.
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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.