AMD Splits In Two, Planning New Fab in 2009

We first learned about AMD’s “Asset Smart” plan a few months ago, but the company today made an official announcement that the company would finally be splitting up into two entities. To help rid some of their debt and also make production easier, AMD has teamed up with an Abu Dhabi company, Advanced Technology Investment Company, who will together create “The Foundry Company” – a temporary name.

Once the new company is established, it will have a total value of $5B, which consists of AMD’s current Fab, ATIC’s contribution of $1.4B and another $1.2B of debt assumed by ‘The Foundry Company’. The only two owners of the new business will be AMD and ATIC, although the latter will own a slightly larger stake at 55.6%. Both companies have equal voting rights, however.

This move is no doubt going to help AMD improve both their business and products over time, and the plans laid out so far look good. Construction will begin in early 2009 in Saratoga County, NY for the first 300mm Fab producing silicon on a 32nm process. This promises to create thousands of jobs in upstate New York and will become the only independently-managed semiconductor manufacturing foundry in the US.

When all said and done, AMD will be part of two companies based in five different locations. Their main HQ will remain in Sunnyvale, California, while their current Fab in Dresden, Germany, will also. Their offices in East Fishkill, New York and Austin, Texas will stay put, with the addition being the upcoming Fab in upstate New York, resulting in two NY-based locations.

In related news, Mubadala, also based in Abu Dhabi, has bought $314 million worth of newly-issued shares and as a result, has bumped its stake in the company to 19.3%, from 8.1%. The stark increase for so little money is due to the fact that the company is now split in two, so the values of each has dropped. They say today is a landmark day for AMD though, and it’s hard to disagree. Their debt is being remedied and a new Fab is right around the corner (at 32nm, no less), which should help push AMD towards becoming much more serious competition for Intel. The coming year is going to be an interesting one.

On Oct. 7, 2008, AMD and the Advanced Technology Investment Company announced the intention to create a new global enterprise, The Foundry Company, to address the growing global demand for independent, leading-edge semiconductor manufacturing. There is a strong shift to foundries occurring – particularly to foundries with the capacity to produce devices using leading-edge process technologies.