AMD amends agreement with GlobalFoundries on wafer deliveries

AMD and GlobalFoundries have made adjustments to their long-term wafer supply agreement. According to AMD, the changes strengthen the partnership, but also give the manufacturer more flexibility to purchase wafers from other chip makers.

AMD will pay GlobalFoundries $100 million under the new agreements, in addition to the costs for the actual deliveries of the wafers. AMD will also pay a quarterly amount to the chip maker from the beginning of 2017, depending on how many chips AMD purchases from other manufacturers.

According to AMD CEO Lisa Su, the renewed agreement gives more flexibility to purchase chips from other chip makers. GlobalFoundries currently makes, among other things, the Polaris GPUs on the 14nm process and will also be responsible for the production of the upcoming Zen processors.

Su states that the goal is to have continuous access to the latest production processes. AMD, which unlike Intel does not have its own chip production facilities, also partners with TSMC for the production of chips. TSMC currently makes Nvidia’s Pascal GPUs on its 16nm process.

The money that AMD pays to GlobalFoundries will, among other things, be used for research into the 7nm process. The chip manufacturer started a five-year project in February to research 7nm, which is worth five hundred million dollars.

GlobalFoundries was created in 2009 after AMD made its chip production branch independent. Since then, the companies have an agreement for the chip production, which will run until 2024. The agreements of this agreement are regularly updated. It is the sixth time that adjustments have been made.