AMD Revises Its 32nm Wafer Deal with GlobalFoundries

AMD has just announced that it modified its wafer purchase agreement with GlobalFoundries in order to revise the pricing methodology applicable to wafers delivered in 2011 for AMD's microprocessor and accelerated processing unit (APU) products.

Under the new deal, AMD will switch from the traditional method of paying per wafer to a pay per good chip approach for the products built using GlobalFoundries' 32nm fabrication node.

This approach has not been used that much before in the semiconductor world and could suggest that GlobalFoundries has some yield problems with its 32nm node, although, as SemiAccurate points out, there are no signs to suggest this is indeed the case.

Also, as part of the deal, AMD agreed to buy a fixed number of 32nm and 45nm wafers per quarter in 2011 and the company estimated that it would end up paying GlobalFoundries somewhere in between $1.1 to $1.5 billion in 2011 and $1.5 to $1.9 billion in 2012 for wafers.

To put things in perspective, in 2010, the Sunnyvale-based company paid GlobalFoundries about $1.2 billion for wafers.

Starting with 2012, AMD will resume paying GlobalFoundries for wafers on a cost-plus basis and has also agreed to pay an additional quarterly amount in 2012 if GloFlo reaches an undisclosed 32nm availability target at the beginning of the next year.

AMD is GlobalFoundries' largest customer and uses the foundry's production facilities to manufacture CPUs as well as the first generation of Fusion APUs.

In addition, GloFlo will also build the future Llano and Bulldozer chips that are based on the 32nm manufacturing process and some 28nm parts, including the Krishna APU and a part of the upcoming AMD Radeon 7000-series GPUs (code-named Southern Islands).

Llano and Bulldozer are expected to launch at the beginning of this summer and are designed to replace AMD's current Phenom II and Athlon II processors.