Summary
Advanced Micro Devices, Inc. (AMD) has filed an 8-K detailing a significant amendment to its Wafer Supply Agreement with GLOBALFOUNDRIES Inc. (GF). This amendment extends the wafer supply and pricing terms through December 31, 2025, specifically for AMD's 12nm and 14nm technology nodes. Key changes include GF increasing minimum annual capacity allocation for AMD and establishing new pricing and annual purchase targets for the period of 2022 through 2025. This agreement is crucial for AMD's supply chain visibility and cost management. The company estimates purchasing approximately $2.1 billion of wafers from GF under this amendment over the four-year period. Importantly, the amendment does not reintroduce exclusivity commitments, allowing AMD to retain full flexibility in sourcing wafers from other foundries across all technology nodes. This continued flexibility is a positive for investors, mitigating concentration risk.
Key Highlights
- 1AMD amended its Wafer Supply Agreement with GLOBALFOUNDRIES (GF) through December 31, 2025.
- 2The amendment covers wafer supply for AMD's 12nm and 14nm technology nodes.
- 3GF will increase minimum annual capacity allocation for AMD for the years 2022-2025.
- 4New pricing and annual wafer purchase targets for 2022-2025 have been agreed upon.
- 5AMD has modified pre-payment terms for wafers in 2022 and 2023.
- 6AMD estimates total wafer purchases from GF between 2022-2025 to be approximately $2.1 billion.
- 7AMD maintains full flexibility to source wafers from other foundries for all technology nodes.