For the quarter ended March 31, AMD reported a net loss of US$590 million, a sharp drop from the $510 million profit it reported in the same quarter last year.

AMD had a charge of $703 million payable to GlobalFoundries, the manufacturing division it , due to an amendment to a chip-supply agreement between the companies.

The new agreement allows AMD to work with other companies to source chips made with an advanced, 28-nanometer manufacturing process. But AMD will continue to work with GlobalFoundries on 32-nanometer parts.

AMD during the quarter that it would buy low-power server vendor SeaMicro for $334 million, to expand its presence in the burgeoning microserver business. The cash impact of the purchase was $281 million, AMD CFO Thomas Seifert said in a statement.

Excluding one-time items, AMD reported income of $92 million, or $0.12 per share. That was ahead of the estimate of $0.09 per share by financial analysts polled by Thomson Reuters.