"Advanced Micro Devices Inc. and the company that manufactures most of its computer chips have restructured their relationship, a deal that will trigger a $703 million charge for AMD and give it more freedom to have some of its products made elsewhere. The agreement announced late Sunday includes a $425 million payment by AMD to Globalfoundries, a company that includes AMD's former manufacturing operations in Germany. AMD also agreed to give up its remaining 8.8% stake in Globalfoundries."
AMD Amends Wafer Supply Agreement With GLOBALFOUNDRIES
"AMD (NYSE: AMD - News) today announced that it entered into an amendment to its Wafer Supply Agreement (WSA) with GLOBALFOUNDRIES Inc. In this amendment, AMD and GLOBALFOUNDRIES agreed to a negotiated wafer price mechanism for 2012. AMD also agreed to transfer its remaining ownership interest in GLOBALFOUNDRIES to GLOBALFOUNDRIES and, as a result, AMD will no longer hold an equity stake in GLOBALFOUNDRIES."
GLOBALFOUNDRIES waived the exclusivity arrangement for AMD to manufacture certain 28nm APU products at GLOBALFOUNDRIES for a 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.