AMD break-up: two voices from Europe

AMD representatives said the plan to divide the company into two separate businesses is being warmly received by its European workers.

The financial world seems to be falling apart, but Advanced Micro Devices has just landed several billion dollars from two Abu Dhabi investment groups to fund "Asset Smart," a plan to spin off its chip manufacturing operations into a new company, tentatively called "The Foundry Co."

The company still has to convince regulators and shareholders, but the move is already getting an enthusiastic response from customers and employees in Europe, according to company representatives.

"It's one of the most difficult weeks in the history of capitalism," said Emilio Ghilardi, senior vice president and general manager of AMD's sales and marketing activities in Europe, Middle East and Africa (EMEA).

"From AMD's point of view this is a great time because within this financial turmoil, we can say to our clients and our employees that AMD is a much stronger company," he said.

By spinning off its semiconductor fabrication plants, or fabs, into a new company and selling a majority share of that to one Abu Dhabi investment fund, and selling a smaller stake in its continuing business of processor design and marketing to another, AMD hopes to have greater financial freedom to invest in new product development.

"Talking to our key customers in Europe, I only got enthusiastic responses," Ghilardi said.

Ghilardi will stay with what he referred to as "AMD 2.0", the part of the company that will design and market the processors.

That company will retain some manufacturing activities related to testing and packaging, the final stages before the processors are shipped to customers.

"We can say to our customers 'Business as usual'," said Ghilardi, adding that there will be no change in the way the company manages customers orders or priority shipments.

On the other side of the coming dividing line will be Jens Drews, currently AMD's director of government relations for EMEA and a long-time resident of the German city of Dresden, the site of AMD's European semiconductor fabs.

"I've thrown my hat into the Foundry Co. side," said Drews.

Based in Europe, Drews won't be involved in one of the most pressing tasks the new company faces in government relations: negotiating the transfer of subsidies that the state of New York agreed to give AMD in return for building a new fab there.

The Foundry Co. plans to upgrade one of its two existing fabs in Dresden. Drews said he sees no need to seek fresh approval for state subsidies already granted for that operation.

Workers at that plant are taking the changes in their stride.

"In the cafeteria today, I sensed a growing excitement," he said. "It gives us a new opportunity," he said.

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