Online information source for semiconductor professionals
Abu Dhabi enters semiconductor foundry business with AMD
Popular articles
Micron moving fast on Hynix in Q208 NAND flash rankings, says iSuppli - 19 August 2008
Numonyx to close California Technology Center - 12 August 2008
Qimonda starts major reorganization: exits PC DRAM market - 13 October 2008
Micron close to Inotera share purchase, says Gartner - 06 October 2008
Applied Materials sees higher CapEx spending for 2009 - 15 August 2008
The much muted ‘asset smart’ plan of AMD has been officially announced. AMD has sold a majority share in its manufacturing operations in Dresden, Germany to the Advanced Technology Investment Company (ATIC), a technology focused investment arm of the Emirate of Abu Dhabi. A temporary name of ‘The Foundry Company’ has been used to describe the spin-off of AMD’s semiconductor manufacturing operations, of which AMD will own 44.4 percent and ATIC will own 55.6 percent.
In establishing the foundry operations, ATIC will invest $2.1 billion to purchase its stake in The Foundry Company, of which it will invest $1.4 billion into the new company and pick up approximately $1.2 billion in debt from AMD as part of the deal.
The Abu Dhabi investment will also include an injection of funds of at least a further $3.6 billion and as much as $6 billion to expand production over the next five years. Key focus starts in early 2009 with the start of tool installing at the shuttered fab in Dresden, Fab 38 and the construction of a new 300mm fab at Luther Forrest, New York State sometime in 2009.
As part of the manufacturing transformation, AMD executives Doug Grose and Hector Ruiz will leave AMD and become CEO and Chairman, respectively, of the Foundry Company.
The Foundry Company expects to offer leading-edge bulk CMOS process technology at the re-opened Dresden fab, developed as part of AMD’s R&D collaboration with IBM. The new foundry has already been accepted into the IBM technology alliance.
The ‘asset smart’ move by AMD will also see a further injection of funds by Abu Dhabi investment firm Mubadala to the tune of $314 million paid to AMD for 58 million newly issued AMD shares and warrants for 30 million additional shares. The cash injection will see Mubadala’s share ownership in AMD increase from 8.1 percent to 19.3 percent. The firm will also get a seat on AMD’s board.
“Today is a landmark day for AMD, creating a financially stronger company with a tightened focus,” said Dirk Meyer, President and CEO of AMD. “With The Foundry Company, AMD has developed an innovative way to focus our efforts on design while maintaining access to the leading-edge manufacturing technologies that our business needs without the required capital-intensive investments of semiconductor manufacturing.”