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AMD plans to buy $1.6 billion in silicon wafers from GlobalFoundries

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Advanced Micro Devices Inc. said late Thursday it plans to buy about $1.6 billion in silicon wafers from GlobalFoundries Inc. over the next few years.

In a Securities and Exchange Commission filing, AMD
AMD,
-2.08%

said it entered into a seventh amendment to its wafer supply agreement with GlobalFoundries “to extend GF’s capacity commitment and wafer pricing to the company under the backdrop of the current global supply environment.”

Under the amendment, AMD and GlobalFoundries agreed to pricing and purchase targets from 2022 to 2024, with AMD on the hook to pay GF “a portion” of the difference that it does not buy under the targets.

GlobalFoundries was created in 2009 when AMD spun off its fab capacity and partnered with Advanced Technology Investment Co. “Fabs,” in chip parlance, are the highly specialized manufacturing plants that produced the silicon wafers needed to make semiconductors.

AMD shares ticked 0.1% higher after hours, following a 2.1% decline to finish the regular session at $73.09. While shares are up 40% over the past 12 months, they’re also 26% off their January highs.

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