Business

AMD cuts chip orders with global PC market in decline

Major semiconductor company Advanced Micro Devices has substantially sliced orders to chip manufacturer GlobalFoundries because it expects a “choppy demand environment” for PCs in 2013.

AMD previously contracted to purchase about $500 million in wafers from GlobalFoundries in the fourth quarter, but it has now lowered that to just $115 million. AMD’s contract now sits at $1.15 billion for fiscal 2013. Amending its contract with GlobalFoundries will cost AMD a penatly of about $320 million.

The trouble with AMD shouldn’t be too surprising to those paying attention. Global PC shipments will fall by 1.2 percent in 2012, according to the latest estimates by IHS iSuppli. Two major factors are likely to blame to the decline — a shaky economy and the adoption of mobile devices like smartphones and tablets that are supplanting PCs.

Since January, AMD’s stock price has dropped more than 60 percent, and there are persistent rumors that it’s looking for someone to buy it. A recent report also suggests AMD plans to sell its 58-acre Austin, Tex. campus.

AMD chip photo via Don Scansen/Flickr


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