AMD insures $2.1 billion worth of chips through contract with GlobalFoundries

Advanced Micro Devices (AMD) changes an agreement with GlobalFoundries to secure a larger order of wafers. GlobalFoundries will supply $2.1 billion worth of wafers to AMD between 2022 and 2025.

Wafers serve as the basic material for the production of chips. A wafer is cut into small pieces to make chips. Chip manufacturers such as AMD are therefore enormously dependent on wafers to be able to produce. Quite a challenge, because the global supply has been insufficient to meet the market demand since 2019.

In May of this year, AMD and GlobalFoundries signed an agreement. GlobalFoundries would supply $1.6 billion worth of wafers to AMD between 2022 and 2024. Because such agreements are subject to approval by the US Securities and Exchange Commission in the United States, the organizations filed an application. We now know that the application has been amended and approved.

The agreement between GlobalFoundries and AMD is changing. GlobalFoundries will supply AMD with $2.1 billion worth of wafers between 2022 and 2025. With this, AMD gains production security over the period.

Old acquaintances

GlobalFoundries was founded in 2009 and is a continuation of former AMD factories. Until 2018, GlobalFoundries was AMD’s largest supplier. The collaboration ended that year. AMD switched to TSMC, the world’s largest chip supplier. TSMC has been AMD’s main supplier ever since, but is unable to supply all the necessary equipment. AMD was forced to knock on the door of GlobalFoundries for certain chipsets. This is expressed in the new agreement.