First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.
Analysts: Spin-off puts AMD back in the fight with Intel
- — 08 October, 2008 11:22
The new offshoot business, which is being temporarily called The Foundry Co., will be co-owned by AMD and ATIC, which is owned by the government of Abu Dhabi in the United Arab Emirates. ATIC will shell out US$2.1 billion -- US$1.4 billion going to the new company and the rest going straight to AMD, according to AMD.
The Foundry will assume about US$1.2 billion of AMD's debt.
ATIC will own 55.6% of The Foundry and AMD will own 44.4%. Its board of directors will be equally divided between representatives from AMD and ATIC.
As part of the deal, Mubadala Development Co., also based in Abu Dhabi, will pay $314 million to increase its stake in AMD from 8.1% to 19.3%.
"We are joining with the Advanced Technology Investment Co. to create a brand new company -- one that epitomizes a new global enterprise with talent and resources from around the world," said Dirk Meyer, AMD's president and CEO, in a conference call this morning. "This will result in a financially stronger and more focused AMD."
Although AMD will be The Foundry's first customer, it will build chips for other companies as well.
Doug Grose, senior vice president at AMD and the incoming CEO of The Foundry, said in a conference call Tuesday that ATIC has promised to invest between US$3.6 billion and US$6 billion over the next five years to fund an expansion of The Foundry's chip-making capacity. The plan includes going forward with a planned capacity expansion at a fab facility in Dresden, Germany, next year.
Lau, however, noted that all the influx of cash does not erase all of AMD's debt. The company has been carrying about $5.4 billion in debt, so the deal will leave it with US$3.3 billion in debt. "There is still a lot of debt but the cash burn to maintain the fabs is no longer there," he added. "We believe this is well received as a positive for the company going forward."