GlobalFoundries will no longer be the sole supplier of AMD's 12nm and 14nm nodes
Latest update time：2021-09-14 15:31
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The global semiconductor crisis has plagued CPU and GPU manufacturers and left them queuing up for the opportunity to manufacture silicon chips. According to the latest news, Advanced Micro Devices (AMD) has modified its agreement with GlobalFoundries Inc.
AMD is reluctant to source chips made on the 12nm and 14nm process nodes from Global Foundries. The rest of the company's products are made by TSMC.
GlobalFoundries is one of two chipmakers currently operating in the United States. However, it does not manufacture semiconductors at the leading 7nm and 5nm process nodes. As a result, most semiconductor production is concentrated in the Asian continent. TSMC and Samsung have absolute control over this field globally, and American chip giant Intel is racing to catch up.
According to the Seventh Amendment to the Wafer Supply Agreement shared by AMD, GlobalFoundries will no longer be its exclusive supplier for 12nm and 14nm nodes.
Specifically, the amendments are:
Specifically, GF agreed to allocate minimum annual capacity to the Company in 2022, 2023, and 2024. The Seventh A&R Amendment also cancels all prior exclusivity commitments and provides the Company with full flexibility to contract with any foundry for all products manufactured in any manner at any technology node.
As a result, AMD will prepay GlobalFoundries for certain products that it will purchase in the coming years. The prepayment will cover products that AMD has agreed to purchase from GlobalFoundries between 2022 and 2024; however, it will not pay for all of it up front.
AMD has not yet disclosed the exact amount of the shortage, but it has highlighted that it will purchase approximately $1.6 billion in wafers from GlobalFoundries from 2022 to 2024.
In addition, the Company and GF agreed to establish pricing and new annual wafer purchase targets for 2022, 2023 and 2024, and the Company agreed to prepay GF certain amounts of wafers in 2022 and 2023. If the Company exceeds the annual wafer purchase target for any of those years, the Company will be required to pay GF a portion of the difference between actual wafer purchases and the wafer purchase target for that year. The Company currently estimates that it will purchase approximately $1.6 billion of wafers from GF between 2022 and 2024 under the Seventh A&R Amendment.
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