Stock

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

Advanced Micro Devices Inc. announced late Thursday that it plans to purchase approximately $ 1.6 billion worth of silicon wafers from GlobalFoundries Inc. over the next several years.

In a filing by the Securities and Exchange Commission, AMD
AMD,
-2.08%
said it made a seventh amendment to its wafer supply agreement with GlobalFoundries "to extend GF's capacity commitment and wafer pricing to include the company in the current global supply environment".

As part of the change, AMD and GlobalFoundries agreed on price and purchase targets from 2022 to 2024, with AMD being on the hook to pay GF “a portion” of the difference it doesn't buy under the targets.

GlobalFoundries was established in 2009 when AMD outsourced its factory capacity and partnered with Advanced Technology Investment Co. “Fabs” in chip parlance are the highly specialized production facilities in which the silicon wafers required to manufacture semiconductors were manufactured.

AMD stocks rose 0.1% after hours after falling 2.1% and ending the regular session at $ 73.09. While stocks are up 40% in the past 12 months, they're also 26% below their January highs.

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