Wednesday, October 8, 2008

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AMD hives off plants and debt in Abu Dhabi joint venture
07/10/2008

Advanced Micro Devices, the chip-maker struggling to erode the dominance of rival Intel, has teamed up with the Advanced Technology Investment Company of Abu Dhabi to form a semi-conductor manufacturing company.
The new company, currently referred to by the temporary name 'The Foundry Company', will build a new state of the art manufacturing facility in New York and will expand Advanced Micro Devices' (AMD) manufacturing facilities in Dresden, Germany.
AMD will contribute its manufacturing facilities to the Foundry Company, as well as related assets and intellectual property rights, while the Advanced Technology Investment Company (ATIC) will pump in $1.4bn into the new company.
ATIC, a government sponsored investment agency, has committed additional equity funding to The Foundry Company of a minimum of $3.6bn and a maximum of $6.0bn over the next five years to fund the expansion of The Foundry Company's chip-making capacity beyond the manufacturing facilities initially contributed by AMD.
ATIC will also pay $0.7bn to AMD which the chipmaker will use to buy shares in the Foundry Company. ATIC will own 55.6% of the newly formed company's common stock and AMD will own the remainder. Both companies will be equally represented on the board.
The Foundry Company will take on $1.2bn of AMD's existing debt.
AMD announced that the Mubadala Development company has increased its stake in AMD to 19.9%.




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