AMD uses Abu Dhabi cash to split

AMD HQ

Investment from Abu Dhabi-based firms will allow chip manufacturing titan AMD to split into two businesses, one to design chips and one to manufacture them.

The manufacturing arm will be named The Foundry Company and will be more than 50 per cent owned by the Advanced Technology Investment Company, with the rest remaining with AMD. The two companies will have equal voting rights and AMD will receive more than $6bn in backing.

The Foundry Company will make AMD-designed chips, as well as those of other manufacturers. The company will be headquartered in the US and plans to start work shortly on developing two manufacturing facilities in Dresden and New York state.

AMD will then focus on the design and development of chips. The company claimed spinning off the manufacturing business and permitting other firms to have access to its facilities would give it a stronger financial footing. The chip giant is in need of shot in the arm as it has been losing money for the last six quarters. Former chief executive Hector Ruiz was ousted this summer after $1.2bn loss in Q2 2008.

His replacement Dirk Meyer told the New York Times: “This is the biggest announcement in our history. 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.”