ATIC partners with AMD to fund new semiconductor facility

Dubai: Advanced Micro Devices (AMD), a manufacture of computer processors, yesterday announced plans to split the company in two in an effort to remain competitive with arch-rival Intel.

Two Abu Dhabi firms, the Advanced Technology Investment Company (ATIC) and Mubadala, will invest at least $6 billion into AMD and the Foundry Company, the new manufacturing company being formed.

"Today is a landmark day for AMD, creating a financially stronger company with a tightened focus," said CEO Dirk Meyer during a conference call.

The Foundry Company, which will take over AMD's two semiconductor plants in Germany, will be headed by Hector Ruiz, who will step down from his role as AMD's executive chairman to become chairman of the Foundry. Doug Grose, AMD's current senior vice-president of manufacturing operations, will be the Foundry's CEO.

ATIC, a company formed by the Abu Dhabi government, will own 55.6 per cent of the Foundry, which will be headquartered in the US. It will invest an initial $2.1 billion into the Foundry to upgrade the two plants in Germany. $700 million of that investment will count as a payment to AMD for ATIC's stake in the new company.

ATIC will also invest between $3.6 and $6 billion in a new plant in New York.

Board

The Foundry's board will be made of an equal number of members from AMD and ATIC.

Doug Grose, who is slated to be the Foundry's CEO, said the company may build a semiconductor manufacturing plant in Abu Dhabi, but the company would have to consider market conditions in the semiconductor industry. Grose said the Abu Dhabi factory would only be considered after the upgrades in Germany and new plant in New York were completed.

According to ATIC chairman, Walled Al Mokarrab, the investment in the Foundry is the company's first major investment.

The Mubadala Development Company, the investment arm of the Abu Dhabi government that purchased an 8.l per cent stake in AMD last November, also announced that it would invest an additional $314 million for 58 million new shares, which will increase its stake in the company to 19.3 per cent. Mubadala will also receive a seat on AMD's board of directors.

"We are as excited about AMD's potential as we were when we made our first investment a year ago," said Khaldoon Al Mubarak, Mubadala's chief executive and managing director.

Despite the West trying to place blocks, do you think Arab investment is here to stay? How do you think this is going to impact the economy of the region?