Business Context and Reporting Period
Company: Advanced Micro Devices, Inc. (AMD)
Filing Type: Form 8-K (Current Report)
Date of Report: March 30, 2014
Event: Entry into a Material Definitive Agreement (Fourth Amendment to Wafer Supply Agreement with GLOBALFOUNDRIES Inc.)
Key Financial Metrics
This filing does not report revenue, profit, cash flow, margins, debt, or liquidity metrics for the company. It focuses exclusively on a specific contractual commitment.
- Estimated Wafer Purchases (2014): Approximately $1.2 billion
- Counterparty: GLOBALFOUNDRIES Inc. (GF)
- Scope: Microprocessor units, graphics processor units, and semi-custom game console products
Material Changes
On March 30, 2014, AMD entered into the Fourth Amendment to its Wafer Supply Agreement with GF. The primary changes include:
- Establishment of volume purchase commitments for the 2014 calendar year.
- Implementation of fixed pricing for the 2014 calendar year.
- Modification of certain other terms applicable to wafers delivered during 2014.
Outlook, Risks, and Management Commentary
Management Commentary: AMD expects that future purchases from GF will continue to be material under the Wafer Supply Agreement. The full text of the Fourth Amendment will be filed with a subsequent Quarterly Report on Form 10-Q.
Risks and Forward-Looking Statements: The filing contains forward-looking statements regarding future wafer purchases. Actual results may differ materially due to risks described in AMD's Annual Report on Form 10-K for the fiscal year ended December 28, 2013. AMD does not intend to update these forward-looking statements.
Investor Verification Checklist
- Verify the final terms of the Fourth Amendment when filed in the next Form 10-Q.
- Monitor actual wafer purchase volumes against the $1.2 billion estimate for 2014.
- Review the Form 10-K for the fiscal year ended December 28, 2013, for detailed risk factors affecting the supply agreement.
- Confirm the impact of fixed pricing on AMD's gross margins in upcoming quarterly earnings reports.