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What you need to know for 01/19/2017

AMD to reduce purchases from GlobalFoundries

AMD to reduce purchases from GlobalFoundries

Advanced Micro Devices will be cutting back on its purchases of computer chips from GlobalFoundries,

Advanced Micro Devices will be cutting back on its purchases of computer chips from GlobalFoundries, which has a new, $7 billion plant in Malta.

The two companies have renegotiated a supply contract that runs through 2014, and AMD will be paying a $320 million fee to GlobalFoundries because of its reduced purchases in the last quarter of 2012, AMD officials announced.

The change is due to market dynamics, officials said, referring to slow personal computer sales. Both companies said they will continue to work together closely.

“GlobalFoundries’ performance in meeting our delivery requirements in 2012 was strong, and they remain a strategic and important foundry partner moving forward,” AMD CEO Rory Read said in a statement.

“We expect AMD to remain a major customer for the foreseeable future,” said GlobalFoundries spokesman Travis Bullard. “However, our plan from the beginning has been to diversify our customer base and become a truly independent semiconductor foundry.”

AMD was GlobalFoundries’ original parent company, formed when AMD sold its manufacturing operations to an Abu Dhabi investment fund in 2009.

GlobalFoundries, which has been growing and recently became the second-largest computer chip foundry company in the world, has more than 160 customers, Bullard said.

The Fab 8 plant at the Luther Forest Technology Campus, GlobalFoundries’ only U.S. manufacturing plant, has about 1,900 employees. It recently began commercial production.

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