AMD to Split Into Two Companies

October 7th, 2008 at 12:00 am
 


advanced micro devices amd processors chips semiconductors foundry

Advanced Micro Devices announced that they will be splitting the company into two.  One part will be focused on designing microprocessors and the other part will be manufacturing the processors.  However, unlike before, the manufacturing business will also accept outside clients.

AMD is the maker of graphics, computer and server processors which is the only competitor to Intel.  In a drastic effort to maintain that status, AMD has signed up with 2 Abu Dhabi based investment firms to infuse at least $6 billion dollars and finance a new chip manufacturing plant in New York State.

The new company focused on designing the chips will retain the AMD name and ownership.  On the other hand the new chip manufacturing company now temporarily known as the Foundry, will be mostly owned by Advanced Technologies Investment Company with AMD controlling 44%.

Advanced Technology, which was formed by the Abu Dhabi government, has promised to put up $2.1 billion immediately and contribute $3.6 billion to $6 billion more to build or upgrade chip fabrication plants, also known as fabs. A.M.D. said the two companies would share voting control equally.

“This is the biggest announcement in our history,” said A.M.D.’s chief executive, Dirk Meyer. “This will make us a financially stronger company, both in the near term and in the long term, as a result of being out from the capital expense burden we have had to bear.”

The Foundry will still mostly manufacture chips for AMD as well as other customers.  This will place the new entity in competition with a host of companies, many of them in Asia, that produce chips designed by other companies.