Globalfoundries |
6 Months Ended |
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Jun. 25, 2016 | |
| Related Party Transactions [Abstract] | |
| Globalfoundries |
GLOBALFOUNDRIES
Wafer Supply Agreement. The Wafer Supply Agreement (WSA) governs the terms by which the Company purchases products manufactured by GLOBALFOUNDRIES Inc. (GF).
Fifth Amendment to Wafer Supply Agreement. On April 16, 2015, the Company entered into a fifth amendment to the WSA. The primary effect of the fifth amendment was to establish volume purchase commitments and fixed pricing for the 2015 calendar year as well as to modify certain other terms of the WSA applicable to wafers for some of the Company's microprocessor unit, graphics processor unit and semi-custom products to be delivered by GF to the Company during the 2015 calendar year.
The Company’s total purchases from GF related to wafer manufacturing and research and development activities for the quarters ended June 25, 2016 and June 27, 2015 were $85 million and $246 million, respectively. The Company’s total purchases from GF related to wafer manufacturing and research and development activities for the six months ended June 25, 2016 and June 27, 2015 were $293 million and $416 million, respectively.
The Company’s currently known purchase obligations to GF for wafer manufacturing and research and development activities are approximately $434 million for fiscal 2016 which include certain wafer deliveries under the fifth amendment to the WSA that had been delayed to fiscal 2016. The Company is not able to meaningfully quantify or estimate its future purchase obligations to GF beyond this amount because it is currently in the process of negotiating a sixth amendment to the WSA. The Company expects that its future purchases from GF will continue to be material.
GF continues to be a related party of the Company because Mubadala Development Company PJSC (Mubadala) and Mubadala Technology Investments LLC (Mubadala Tech) are affiliated with West Coast Hitech L.P. (WCH), the Company’s largest stockholder. GF, WCH and Mubadala Tech are wholly-owned subsidiaries of Mubadala.
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