updated 07:55 pm EDT, Mon April 4, 2011
AMD will only pay for working chips, not defects
AMD has reportedly tweaked the supply agreements with its spin-off fabrication company, GlobalFoundries. The new terms are said to be focused on improving production quality, after the manufacturer encountered difficulties with its 32-nanometer chips. AMD now will pay only for working chips, rather than covering for defective components removed from production runs.
"The discussion was triggered last year when the 32- nanometer ramp was a bit more challenging," said interim CEO Thomas Seifert, according to quotes posted in Businessweek.
The executive downplayed the new terms as nothing more than "downside protection" and an additional incentive for improvement. He also noted that GlobalFoundries has managed ramp up output numbers to satisfy AMD's demand. The manufacturer has also begun producing AMD's Llano-series desktop chips, which are expected to arrive on the market this summer.