RSSAMD's huge gamble: Foreign investors will co-own new foundries
By Tim Conneally | Published October 7, 2008, 10:38 AM
Two Abu Dhabi investment firms, both arms of the Emirate's government, have helped the AMD in its "Asset Light/Asset Smart" stragegy, and with their investments, may have changed the path of the struggling company.
Mubadala Development Company, which took an eight percent stake in AMD last year, now holds almost 20 percent of AMD, and the Government of Abu Dhabi (as ATIC) has become a 50/50 partner in AMD's spun-off fabrication company.
Today AMD announced it will be spinning off its semiconductor manufacturing business with a fifty percent investment from Advanced Technology Investment Company (ATIC), a new investment project from the government of the Emirate of Abu Dhabi, Fortune magazine's richest city in the world.
Currently, the new company does not have a formal name, but is being referred to as "The Foundry Company." ATIC invested $5.7 billion to co-own AMD's two fabrication facilities in Dresden, Germany, plus its related assets and intellectual properties, and finally begin work on the Saratoga, New York fabrication facility that AMD has been talking about since 2006.
In 2006, however, AMD spoke of its plans for a 45 nm facility. As time passed, the company more recently adjusted its outlook and said the facility would be 32 nm. Today's announcement said, "The Foundry Company will join the IBM joint development alliance for both silicon-on-insulator (SOI) and bulk silicon through the 22 nm generation. The alliance consists of a group of leading semiconductor companies collaborating on next generation silicon technologies."
After completing the long-awaited Saratoga facility, The Foundry Company plans to open a facility in Abu Dhabi. When asked about job cuts elsewhere in AMD, COO Dirk Meyer today said, "This is about job creation, and the interest of creating jobs for the community." The company expects the Saratoga facility will create nearly 1,700 new jobs.
Current AMD Chairman Hector Ruiz announced in July that he would be stepping down from his CEO post at AMD into an "executive chairman of the board" slot, with Dirk Meyer taking the helm of AMD. Today, the announcement was made that Ruiz will become chairman of The Foundry Company. Senior Vice President of Manufacturing Operations Doug Grose will become the Foundry Company's CEO. AMD will own 44.4% of the company's stock, and ATIC will own 55.6%.
And as Mubadala has increased its ownership of AMD by purchasing $314 million worth of 58 million new AMD shares, it will be electing its own member to the company's board of directors. This designee will likely participate in the naming of AMD's new chairman, as the company declined comment today as to how it plans to fill that vacancy.
They will push AMD for the CNBIB technology !
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|This is not good. Once the Arabs own this technology they will use it against us.
Anyone with one half of a brain knows they don't like America. They have money to burn because we gave it to them for their stinking, overpriced oil. Hopeless.
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|I'm sorry, but what the **** are you on about?
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|They are going to attack us with AMD processors?
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|Yeah, but 1st they are going to cut your supply of sand and keep it all for themselves in the Sahara. Then what..?
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|Not sure the Emirates dislike America. Sure, Iraq isn't too pleased with us (well, their people aren't- the Iraqi government wants us to stay and stabilize their nation), or Saudi, but I can't seem to recall any instances of the Emirates being labeled as enemies of America or anything... Now I will admit there's been some deep-rooted negativity in the general Middle East region from centuries-past aggressive activities, but that may not be as universally true as some may think.
Anyway, Abu Dhabi has been investing in AMD for a good long while. This was bound to happen eventually.
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|Wow.. the Arabs are trying to get into tech..
AMD does not have many options and needs to do anything to keep from losing it all..
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|Yeah, after all they invented algebra and modern science...
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|Are you sure that wasn't Al Gore? I thought he invented everything!
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|AMD sinks further into oblivion. They had a nice run at the top for a while there but it looks very unlikely they will ever hold that place again. Too bad they had to buy ATI and drag it to the grave with them.
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|i used to be a fan. Now that Intel is kicking their a** I will purchase that way. As for the investmentsGood for AMD bad for North America as it couldnt find investors here
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|Honestly, its people like this that put AMD into this situation- they slip just a little behind Intel and suddenly a chunk of people who claimed to be AMD fans and supporters become Intel sheep. And then they slip even more as more people lose confidence in the larger and larger 'perceived' gap, which ends up a vicious cycle for AMD. People turn their backs on them, they lose profits, they fall further behind on performance.
Me? I have an AMD Phenom 9850 in my main computer and it runs everything just fine (game-wise, it can handle the highest-end stuff CPU-wise, with the Radeon 4870 the only limiter with inefficiently-coded games like Crysis), so I don't get why so many people turned their backs on them when their tech can still perform well, and its usually been at a better price point. Usually, but not always, admittedly.
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|I am a big fan of AMD - the chips ran very cool and fast - not to mention inexpensive. But this sounds like too much s***ing of process and will ultimately disrupt production quality.
http://afewtips.com
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