AMD has promised to pay $30.28bn for wafers and packaging it has not received. it made $11.54bn of revenue in the quarter it filed that number.
AMD does not own a factory. everything it sells is manufactured by somebody else, mostly tsmc, and the way you get a production slot two or three years out is to promise you will take the output and pay for it whether you end up needing it or not. that promise is not borrowing and it does not appear on the balance sheet. it is one line in a footnote of the 10Q.
which was $3.99bn in march 2024 and it is $30.28bn now, 7.6 times bigger. revenue roughly doubled over the same eight filings. so the promise went from about two thirds of one quarter's sales to two and a half quarters of them. AMD spent $1.2bn on its own PP&E in the half year and committed $30bn to everyone else's.
that “unconditional” in the note is doing a lot of work. it basically locks in one side. AMD owes the supply chain whether or not the mi355x racks that went to saudi arabia get repeated, and nothing in there puts a customer on the hook on matching terms.
at two and a half quarters of sales, one weak quarter turns reserved capacity into parts AMD has to accept and cannot move on. intel and samsung run that same inventory risk, but they own the plant and write it down over years. AMD is carrying it with no fab and nothing to spread it across.
a purchase obligation is a promise to buy. so nothing in the note says who the eventual customer is, or whether there is one. there should be an order book visible.
AMD does not own a factory. everything it sells is manufactured by somebody else, mostly tsmc, and the way you get a production slot two or three years out is to promise you will take the output and pay for it whether you end up needing it or not. that promise is not borrowing and it does not appear on the balance sheet. it is one line in a footnote of the 10Q.
which was $3.99bn in march 2024 and it is $30.28bn now, 7.6 times bigger. revenue roughly doubled over the same eight filings. so the promise went from about two thirds of one quarter's sales to two and a half quarters of them. AMD spent $1.2bn on its own PP&E in the half year and committed $30bn to everyone else's.
that “unconditional” in the note is doing a lot of work. it basically locks in one side. AMD owes the supply chain whether or not the mi355x racks that went to saudi arabia get repeated, and nothing in there puts a customer on the hook on matching terms.
at two and a half quarters of sales, one weak quarter turns reserved capacity into parts AMD has to accept and cannot move on. intel and samsung run that same inventory risk, but they own the plant and write it down over years. AMD is carrying it with no fab and nothing to spread it across.
a purchase obligation is a promise to buy. so nothing in the note says who the eventual customer is, or whether there is one. there should be an order book visible.
