SUNNYVALE (dpa-AFX) - AMD (AMD) announced that it entered into an amendment to its Wafer Supply Agreement or WSA with GLOBALFOUNDRIES Inc. Under amendment deal, AMD and GLOBALFOUNDRIES agreed to negotiated wafer price mechanism for 2012. AMD also agreed to transfer remaining ownership interest in GLOBALFOUNDRIES to GLOBALFOUNDRIES.
Under deal, GLOBALFOUNDRIES waived exclusivity arrangement for AMD to manufacture certain 28nm APU products at GLOBALFOUNDRIES for specified period.
As a result, AMD agreed to pay GLOBALFOUNDRIES a cash payment of $425 million, of which $150 million is being paid on March 5, 2012, $50 million will be paid by July 2, 2012, $50 million by October 2, 2012 and $175 million in the first quarter of 2013.
In addition, AMD issued a promissory note to GLOBALFOUNDRIES for the payments due by October 2, 2012 and first quarter 2013.
AMD expects to record a one-time charge of $703 million in Q1 2012 consisting of $425 million cash payment and the remainder will be a non-cash charge.
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© 2012 AFX News
