Wednesday, October 8, 2008

AMD will Spin-off

AMDOn Tuesday AMD announced that it would spin-off. After the spin-off of the two companies will focus on microprocessor design and manufacturing.

It is understood that AMD got 84 billion U.S. dollars investment from the United Arab Emirates Abu Dhabi government. The production plant will be included in the new joint venture company. Advanced Technology Investment which is setted up by the Abu Dhabi government, will pay AMD 7 billion U.S. dollars for 56% stake of new company, while the rest belong to AMD.

The company's name is Foundry, will continue to produce AMD processor chips, and to seek contracts from other companies. The AMD will focus on the design and marketing of chips. This system will allow AMD to fully develop new products without having to spend billions of dollars on production.

According to the reports, Foundry will have two factories in Germany and build a new factory in New York. The company will inherit the AMD's debt, the value is 12 billion U.S. dollars. In the future, Foundry will also receive up to 60 billion dollars from the Government of Abu Dhabi to expand production, as well as working capital which is up to 14 billions U.S. dollars. In addition, the Government of Abu Dhabi will pay 314 million U.S. dollars raise the proportion of shares to 19%. Last year, the Abu Dhabi government invested AMD and gained 8.1% share.

AMD currently has 16,000 employees. About 3,000 people will be included in Foundry.

Dirk Meyer, the CEO of AMD said this will allow AMD to be more robust in the financial aspects and better targeting.

Originally Posted: China Business Daily
Author: Angulo Fu