It will be interesting to see if there is a delayed 200mio$ WSA payment in Q4 to GloFo. And yet another reason why AMD is forced to change the production to GloFo, impossible before because GloFo couldnt produce them.
They are shut out of the bond market, except at junk rates, they have shed real estate assets and this last 500MM line is backed by client's receivables. They haven't many options by now, either IP sale or put the console contracts inside an SPE, or bring new investor's money on board.
That 500MM line they hired means two things for me:
- They are expecting to burn cash from their operation this and in the next few quarters.
- They have to pay GLF in full.
And while AMD is probably being forced to move the console APU's to GLF, that's far from being a bad deal unless GLF is not being as generous to AMD as they are with their other clients. Embedded business is perfect for Globalfoundries/AMD: it is high volume, it is not bleeding edge, it relies primarily on price.