AMD to launch chip foundry in joint venture
The Silicon Valley semiconductor company is joining forces with an investment firm and will produce chips for other semiconductor companies
By Jim Carbone -- Purchasing, 10/7/2008 9:37:00 AM
Chipmaker AMD will team up with an Abu Dhabi investment company to create a new semiconductor foundry company. The new global company will temporarily be called “The Foundry Company.”
AMD, based in Sunnyvale, Calif., will contribute its manufacturing facilities to the new venture, including two fabrication facilities in Dresden, Germany, as well as related assets and intellectual property rights. Advanced Technology Investment Company will invest $2.1 billion to purchase its stake of The Foundry Company. ATIC will invest $1.4 billion directly in the new entity and the remainder will be paid to AMD to purchase additional shares in The Foundry Company.
The Foundry Company will also assume approximately $1.2 billion of AMD’s existing debt. ATIC will commit between $3.6-$6 billion over the next five years to fund the expansion of The Foundry Company’s chip-making capacity beyond the manufacturing facilities initially contributed by AMD.
These funds will be used by The Foundry Company to expand capacity at its fabs in Dresden, Germany and for construction of a new state-of-the-art facility in Saratoga County, north of Albany, N.Y.
The New York facility is expected to create more than 1,400 direct jobs, and, through its operation, to generate an additional 5,000 jobs in the region. Once operational, the New York facility will be the only independently managed, leading-edge semiconductor manufacturing foundry in the United States.
The Board of Directors of The Foundry Company will be equally divided between representatives of AMD and ATIC. AMD will own 44.4% and ATIC will own 55.6% of The Foundry Company.
The Foundry Company will join the IBM joint development alliance for both silicon-on-insulator (SOI) and bulk silicon through the 22nm generation. The alliance consists of a group of leading semiconductor companies collaborating on next generation silicon technologies.
The new company’s principal headquarters will be in Silicon Valley and its research and development and manufacturing leadership teams and ecosystems will be based in New York, Dresden, and Austin.
The transaction is expected to close at the beginning of 2009 following satisfaction of conditions such as approvals from regulators and of AMD stockholders.
Also see: AMD gains share in microprocessors
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