We already know AMD suffered from both a slow CPU market and a decrease in market share last quarter. It's no wonder, then, that the company says it has had to reduce its "wafer purchase commitments" with GlobalFoundries this quarter.
AMD doesn't say how much the wafer orders were cut back, but it reveals the reduction will result in a "termination payment" of $320 million. AMD expects to spread the payment over several quarters, although a big, $165-million charge is going to show up in the company's fourth-quarter results. (This wouldn't be the first time AMD has taken a "one-time charge" related to GlobalFoundries. Those charges often go hand-in-hand with quarterly losses.)
AMD also says it plans to "reduce future reimbursements" to GlobalFoundries for "certain research and development costs."
According to Reuters, AMD CEO Rory Read doesn't expect the PC market to recover from its current slump for "several quarters." As the news agency points out, AMD is making other cost-cutting moves to keep its head above the water. The company plans to sell and lease back its Austin campus, and it also announced plans to lay off 15% of its work force back in October.