AMD to Split

8 10 2008

Advanced Micro Devices plans to split into two companies, one to design chips and one to make them, while two investment funds owned by the government of Abu Dhabi will contribute new capital, it said Tuesday. AMD hopes the move will give it the resources it needs to compete effectively with Intel, which dominates the microprocessor industry.

The Advanced Technology Investment Company (ATIC), created by the government of Abu Dhabi, will buy a substantial stake in the chip-making operation, tentatively called The Foundry Co. and contribute additional funds over the next five years to build a new chip fabrication plant, or fab, in New York state and to upgrade one of two AMD fabs near Dresden in Germany. The Foundry Co. will remain headquartered in the U.S., and will also make chips for other companies.

ATIC will invest US$1.4 billion directly in The Foundry Co. and pay another $700 million to AMD, giving it 55.6 percent of the new company and half the seats on the board. AMD will contribute intellectual property rights and its Dresden fabs to the company. AMD will own the remaining 44.4 percent and control the other half of the seats. The Foundry Co. will also assume around $1.2 billion of AMD’s debt.

Over the next five years, ATIC will invest between $3.6 billion and $6 billion to fund redevelopment of one of the Dresden fabs and build a new one in New York.


Actions

Information

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s




%d bloggers like this: