Amended agreement includes $50 million in additional purchase commitments
AMD bumped up its purchase commitments with GlobalFoundries in 2014 by about $50 million. Under terms of the amended Wafer Supply Agreement (WSA), AMD expects to pay $1.2 billion in all this year, though what's interesting is that the deal is no longer limited to traditional CPUs and APUs; it now includes GPUs and semi-custom game console chips, such as those found in the Xbox 360 and PlayStation 4.
AMD has leaned on Taiwan Semiconductor Manufacturing Company (TSMC) to produce graphics chips, including more than 10 million Xbox One and PS4 chips. With console sales expected to keep climbing, AMD essentially ensured that a shortage of parts won't become an issue.
"The successful close of our amended wafer supply agreement with GlobalFoundries demonstrates the continued commitment from our two companies to strengthen our business relationship as long-term strategic partners, and GlobalFoundries’ ability to execute in alignment with our product roadmap," said Rory Read, president and chief executive officer, AMD. "This latest step in AMD’s continued transformation plays a critical role in our goals for 2014."
While specific figures weren't disclosed, AMD and GlobalFoundries did establish fixed pricing and other commitments as part of the amended agreement.