1. Welcome to TechPowerUp Forums, Guest! Please check out our forum guidelines for info related to our community.

AMD and ATIC of Abu Dhabi to Create New Semiconductor Manufacturing Company

Discussion in 'News' started by malware, Oct 7, 2008.

  1. malware New Member

    Joined:
    Nov 7, 2004
    Messages:
    5,476 (1.44/day)
    Thanks Received:
    956
    Location:
    Bulgaria
    AMD and the Advanced Technology Investment Company (ATIC) of Abu Dhabi today announced the creation of a U.S.-headquartered, leading-edge semiconductor manufacturing company to address growing demand for independent, leading-edge foundry production capabilities. The new global company, to be temporarily called “The Foundry Company”, will serve this need by combining advanced process technology, industry-leading manufacturing facilities and aggressive plans to expand its global capacity footprint. At the same time, the Mubadala Development Company will increase its current investment in AMD to 19.3 percent on a fully diluted basis. AMD will contribute to The Foundry Company its manufacturing facilities, including two fabrication facilities in Dresden, Germany, as well as related assets and intellectual property rights.

    ATIC will invest $2.1 billion to purchase its stake in The Foundry Company, of which it 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 has committed additional equity funding to The Foundry Company of a minimum of $3.6 billion and up to $6.0 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 (i) proceed with capacity expansion at its fabs in Dresden, Germany, including an upgrade of one of its fabs to a state-of-the-art facility, and (ii) begin construction on a new state-of-the-art facility in Saratoga County, New York, subject to the transfer of previously-approved New York State incentives. 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.

    Global demand for independent foundry manufacturing is growing because leading semiconductor companies are exiting manufacturing, as the cost and complexity increases and capital and research and development costs have become too high. In addition, the world’s requirements for devices that use more advanced semiconductors continue to grow, and the IBM technology alliance, to which The Foundry Company will belong, creates an increasingly larger foundation for semiconductor innovation.

    The Board of Directors of The Foundry Company will be equally divided between representatives of AMD and ATIC. AMD will own 44.4 percent and ATIC will own 55.6 percent of The Foundry Company’s fully-converted common stock upon its formation.

    Doug Grose will relinquish his current role as AMD’s senior vice president of manufacturing operations to become chief executive officer of The Foundry Company. Hector Ruiz will relinquish his current role as AMD’s executive chairman and chairman of the board to become chairman of The Foundry Company. To augment its announced leadership, the new company plans an aggressive recruitment strategy to round out a world-class semiconductor manufacturing leadership team.

    ATIC is an investment company formed by the government of Abu Dhabi to invest in advanced technology opportunities that require patient capital and long-term time horizons to achieve economic returns while also increasing the economic diversification of Abu Dhabi. While it enhances its capabilities specific to the transaction, ATIC will enter into a 12-month agreement with Mubadala to project manage ATIC’s interest in The Foundry Company.

    As a result of the transactions, AMD will strengthen its financial position and focus on the design and development of innovative computing and graphics solutions. AMD will improve its liquidity through The Foundry Company’s assumption of approximately $1.2 billion in debt, ATIC’s $700 million payment to AMD for ownership interests in The Foundry Company and Mubadala’s $314 million paid to AMD for 58 million newly issued AMD shares and warrants for 30 million additional shares.

    Mubadala, an existing 8.1 percent AMD shareholder, will increase its stake to 19.3 percent of outstanding AMD shares on a fully diluted basis. This will be accomplished through the purchase for $314 million of 58 million newly issued AMD shares and warrants for 30 million additional shares. Mubadala will also have the right to appoint a designee to AMD’s board of directors.

    “Today is a landmark day for AMD, creating a financially stronger company with a tightened focus,” said Dirk Meyer, president and chief executive officer of AMD. “With The Foundry Company, AMD has developed an innovative way to focus our efforts on design while maintaining access to the leading-edge manufacturing technologies that our business needs without the required capital-intensive investments of semiconductor manufacturing. I particularly want to congratulate our Chairman Hector Ruiz, whose vision and leadership of our Asset Smart strategy is fulfilled today.”

    “We are as enthusiastic about AMD’s potential today as we were when we made our initial investment last year,” said Khaldoon Al Mubarak, chief executive officer and managing director of Mubadala. “This increased investment is a strong vote of confidence in AMD’s Asset Smart business strategy, evolved leadership team, and best-in-class technology.”

    “ATIC and AMD are the ideal partners with which to create The Foundry Company,” said Hector Ruiz, chairman of AMD’s board of directors, who will become chairman of The Foundry Company. “Working together allows us to combine ATIC’s long-term vision and patient capital with our manufacturing leadership, innovation and highly-skilled workforce. Moreover, The Foundry Company’s presence in Upstate New York alongside IBM and other research leaders will cement the region’s position as one of the world’s premier centers of nanotechnology development.”

    ATIC Chairman Waleed Al Mokarrab said, “More than a year in the making, today’s announcement significantly reshapes the global semiconductor industry – it is an investment where all parties see significant opportunity. Independent and well-capitalized, The Foundry Company begins day one with an established leading-edge customer, an advanced technology roadmap, an R&D partnership with IBM, and a clear plan to scale capacity, providing it the foundation to become a clear leader in global semiconductor manufacturing.”

    “The creation of The Foundry Company represents a critical milestone in the evolution of the semiconductor industry,” said Doug Grose, who will be the CEO of The Foundry Company. "Companies are eager for choice in the supply of leading-edge manufacturing capacity, and our new venture is answering that call. By combining operational excellence, leading-edge technology developed in collaboration with IBM, and an aggressive capacity roadmap, The Foundry Company aspires to drive the next round of innovation in this industry."

    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.

    "We welcome The Foundry Company into the IBM alliance and are pleased to see the company investing in New York,” said Dr. John E. Kelly III, senior vice president and director of Research at IBM. “The Foundry Company’s membership in the alliance brings new intellectual capital to our collaborative effort and continues to build on the momentum and leadership that the alliance has established in semiconductor technologies."

    Upon closing of the transaction, The Foundry Company will commence operations with approximately 3,000 employees who will transition into the new company from AMD facilities in Silicon Valley, New York, Dresden, and Austin. 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. After the upgrade and expansion in Dresden and the build-out of the New York facility, The Foundry Company envisions expanding its global manufacturing footprint over time, if commercially justified, to also include new fabrication facilities in Abu Dhabi.

    The transaction is expected to close at the beginning of 2009 following satisfaction of conditions such as approvals from regulators, transfer of previously-confirmed New York incentives to The Foundry Company, and the approval of AMD stockholders for the issuance of common stock and warrants to Mubadala. Prior to closing, AMD, ATIC and Mubadala will file a joint voluntary notice of the transaction for review by the Committee on Foreign Investment in the United States (CFIUS), a government inter-agency committee chaired by the Secretary of the Treasury.

    Upon closing, The Foundry Company will:
    • Have a total enterprise value of $5.0 billion, consisting of AMD's contribution of manufacturing assets and intellectual property (including its fabrication facilities in Dresden), intellectual capital and employees valued together at $2.4 billion; ATIC's contribution of $1.4 billion in new capital; and $1.2 billion of debt assumed by The Foundry Company from AMD;
    • Be consolidated with AMD for purposes of financial reporting;
    • Have a board of directors whose membership is equally divided between representatives of AMD and ATIC;
    • Have only AMD and ATIC as stockholders, each of which at the closing will have equal voting rights;
    • Be owned 44.4 percent by AMD and 55.6 percent by ATIC on a fully converted to common basis. ATIC’s economic ownership will increase over time based on the differences in securities held by AMD and ATIC, and depending on whether AMD elects to invest proportionately with ATIC in future capital infusions to support
    • The Foundry Company’s growth;
      Have its principal headquarters in Silicon Valley, and its research and development and manufacturing leadership teams and ecosystems in New York, Dresden, and Austin;
    • Have an exclusive supply agreement with limited exceptions to manufacture AMD processors and to manufacture, where competitive, certain percentages of other AMD semiconductor products;
    • Begin construction of the Fab 4X manufacturing facility in New York in the middle of 2009, directly employing more than 1,400 workers in Upstate New York when the facility is in full operation;
    • Expect to increase capacity through completing the 300mm conversion of a second state-of-the-art facility in Dresden in 2009;
    • Join the IBM technology development alliance for both SOI and bulk silicon technology, greatly expanding the addressable market of The Foundry Company;
    • After the upgrade and expansion in Dresden and the build-out of the New York facility, The Foundry Company envisions expanding its global manufacturing footprint over time, if commercially justified, to also include new fabrication facilities in Abu Dhabi; and
    • Announce its permanent corporate name and identity.

    Upon closing, AMD will:
    • Have equal voting rights with ATIC in The Foundry Company;
      Own 44.4 percent of The Foundry Company on a fully converted to common basis;
    • Improve its liquidity through The Foundry Company’s assumption of approximately $1.2 billion of AMD’s debt, ATIC’s $700 million payment to AMD for ownership interests in The Foundry Company and Mubadala’s purchase for $314 million of 58 million newly issued AMD shares and warrants for 30 million additional shares;
    • Tightly focus on the design and development of the next generation of innovation based on the fusion of computing and graphics processing;
    • Elect a Mubadala designee as a member of its board of directors;
    • Excluding its consolidation of The Foundry Company for financial reporting purposes, improve its net cash position by $2.1 billion, through The Foundry Company’s assumption of approximately $1.1 billion in debt (net of approximately $100 million cash transferred by AMD to The Foundry Company) and cash payments from ATIC and Mubadala aggregating $1.0 billion;
    • Have the option, but not any requirement, to provide additional capital funding to The Foundry Company in response to future capital calls; and
    • Have an exclusive supply agreement with The Foundry Company, with limited exceptions, to manufacture AMD processors and to manufacture, where competitive, certain percentages of other AMD semiconductor products.

    Upon closing, ATIC will:
    • Have equal voting rights with AMD in The Foundry Company;
      Own 55.6 percent of The Foundry Company on a fully converted to common basis;
    • Invest an initial $2.1 billion, of which $1.4 billion will be invested directly in the new company and $700 million will be paid directly to AMD;
    • Commit a minimum of $3.6 billion and up to $6.0 billion in additional funds over the next five years for the upgrade and expansion of fabrication facilities in Dresden and construction of a new facility in Upstate New York.

    Upon closing, Mubadala will:
    • Purchase for an aggregate of $314 million 58 million newly issued AMD shares and warrants for 30 million additional shares, giving it a total stake in AMD of 19.3 percent on a fully diluted basis; and
    • Have a right to designate a representative for election as a member of the board of directors of AMD.

    For more information on the announcement, visit http://www.amd.com/NewGlobalFoundry

    Source: AMD
     
    Last edited: Oct 7, 2008
    Waldoinsc, Kei and lemonadesoda say thanks.
  2. wolf2009 Guest

    interesting, lets pray for AMD
     
  3. laszlo

    laszlo

    Joined:
    Jan 11, 2005
    Messages:
    893 (0.24/day)
    Thanks Received:
    106
    Location:
    66 feet from the ground
    another rich sheikh investor for amd , is good they need money now...
     
  4. WarEagleAU

    WarEagleAU Bird of Prey

    Joined:
    Jul 9, 2006
    Messages:
    10,812 (3.39/day)
    Thanks Received:
    547
    Location:
    Gurley, AL
    Wow, huge news and a boon for AMD. I hope to see great things from this company. More comments when I leave work today.
     
  5. lemonadesoda

    lemonadesoda

    Joined:
    Aug 30, 2006
    Messages:
    6,308 (2.01/day)
    Thanks Received:
    973
    Very interesting. Wow, the geo-econo-political landscape is changing rapidly.
     
    btarunr says thanks.
  6. The Witcher New Member

    Joined:
    Oct 7, 2008
    Messages:
    433 (0.18/day)
    Thanks Received:
    43
    Location:
    United Arab Emirates
    I've to say this is a great news for my country (i'm from UAE and i live in Abu Dhabi ;P)

    Even though i like Intel more than AMD i think this is going to move the computer industry in my region a little and help it to grow.

    Dude i can no longer order hardware's from Amazon.com its too expensive i wish this new HQ attract more hardware providers to my country.

    Btw i always check site everyday so i know most of you since a year now but when i saw this news i thought i should register and be a member of this great community, one last thing excuse me if i misspelled any word...
     
  7. mdm-adph

    mdm-adph New Member

    Joined:
    Mar 28, 2007
    Messages:
    2,478 (0.85/day)
    Thanks Received:
    340
    Location:
    Your house.
    Well, hopefully this won't hurt them any -- it's not like they have to produce the chips themselves, I guess. Nvidia doesn't produce its own chips, and they're hugely successful.
     
  8. KBD New Member

    Joined:
    Feb 23, 2007
    Messages:
    2,477 (0.84/day)
    Thanks Received:
    279
    Location:
    The Rotten Big Apple
    Well, it has begun. I thought something like this was coming for a long time. Though i suspected that someone would simply buy AMD outright. I think this great news from AMD though, they will get some relief from their financial troubles and still remain an independent chip maker.
     
  9. zOaib New Member

    Joined:
    Sep 23, 2005
    Messages:
    985 (0.28/day)
    Thanks Received:
    32
    Location:
    FL
    ahlan wa sahlin

    lived in Dubai for like 8 yrs myself , awesome place to live

    and welcome.
     
  10. NastyHabits

    NastyHabits

    Joined:
    Jan 5, 2008
    Messages:
    1,119 (0.42/day)
    Thanks Received:
    676
    Location:
    Oakland, CA
    Crunching for Team TPU More than 25k PPD
  11. mlupple

    mlupple New Member

    Joined:
    Jun 27, 2008
    Messages:
    209 (0.08/day)
    Thanks Received:
    13
    Location:
    USA
    AMD is teaming up with Emirates... I'm not buying any more AMD or ATI products.
     
  12. Nyte New Member

    Joined:
    Jan 11, 2005
    Messages:
    185 (0.05/day)
    Thanks Received:
    34
    Location:
    Toronto ON
    Is that sarcasm or racism?
     
  13. PCpraiser100 New Member

    Joined:
    Jul 17, 2008
    Messages:
    1,062 (0.43/day)
    Thanks Received:
    68
    This is interesting, AMD now has a new financial lifeline if they get goose-chased by Nvidia and/or Intel again. I'm seeing hope for AMD. Cleverly done.
     
  14. suraswami

    suraswami

    Joined:
    Apr 5, 2005
    Messages:
    6,274 (1.72/day)
    Thanks Received:
    851
    Location:
    Republic of Asia (a.k.a Irvine), CA
    That Hector Ruiz simply will not leave?:mad::banghead:
     
  15. The Witcher New Member

    Joined:
    Oct 7, 2008
    Messages:
    433 (0.18/day)
    Thanks Received:
    43
    Location:
    United Arab Emirates
    i was thinking like that too:shadedshu
     
  16. mdm-adph

    mdm-adph New Member

    Joined:
    Mar 28, 2007
    Messages:
    2,478 (0.85/day)
    Thanks Received:
    340
    Location:
    Your house.
    Worse. It's neither -- it's nationalism. :shadedshu

    You said it -- ain't that the truth.
     
  17. bangmal New Member

    Joined:
    Aug 29, 2008
    Messages:
    20 (0.01/day)
    Thanks Received:
    6
    america running huge deficit every fuckin year, that is borrowing from the others, including the Emirates, what should you do? kill yourself? :nutkick:
     
  18. laszlo

    laszlo

    Joined:
    Jan 11, 2005
    Messages:
    893 (0.24/day)
    Thanks Received:
    106
    Location:
    66 feet from the ground

    i think nobody care :rolleyes:
     
    Kei says thanks.
  19. KBD New Member

    Joined:
    Feb 23, 2007
    Messages:
    2,477 (0.84/day)
    Thanks Received:
    279
    Location:
    The Rotten Big Apple
    this has nothing to do with with a deficit, trade or otherwise. Its called an investment not borrowing. Thats is a good thing. It would be scary if no one wanted to invest in the US economy than we will be in serious trouble. I'm not saying that we should allow all kinds of countries to invest without doing some backround checking but UAE is wealthy country that sits on all kinds of cash, they are one of the more enlighted nations in the Islamic world. There is nothing bad about them helping AMD
     
    bigtye and NastyHabits say thanks.
  20. NastyHabits

    NastyHabits

    Joined:
    Jan 5, 2008
    Messages:
    1,119 (0.42/day)
    Thanks Received:
    676
    Location:
    Oakland, CA
    Thank you for bringing some sanity and light into this discussion. Not all Islamic countries are extremist or support Al-Qaida. Thats like saying all blacks are criminals and all whites are racists. The UAE, is a relatively enlightened country that is looking beyond oil and making investments in the future. I will be only too happy to purchase a computer product that isn't made in China for a change.
     
    mdm-adph and Kei say thanks.
    Crunching for Team TPU More than 25k PPD
  21. bigtye New Member

    Joined:
    Apr 10, 2008
    Messages:
    212 (0.08/day)
    Thanks Received:
    36
    Location:
    Melbourne
    It's good to be concerned about where your money is going, however in this case, as others have pointed out, you may need to do some more research.

    Often we spend money on products and are not aware of who the money is going to or supporting. Supporting our country is also noble, however we must be careful this does not turn into blind nationalism.

    By all means though be an informed consumer, just make sure you are informed by the facts and not by popular sentiment or generalisations.

    As an AMD fan it is good news to hear that it has secured further investment.

    Tye
     
  22. cdawall where the hell are my stars

    Joined:
    Jul 23, 2006
    Messages:
    20,690 (6.52/day)
    Thanks Received:
    2,987
    Location:
    some AF base
    cool so more AMD chips will come from this right?
     
  23. KBD New Member

    Joined:
    Feb 23, 2007
    Messages:
    2,477 (0.84/day)
    Thanks Received:
    279
    Location:
    The Rotten Big Apple
    I'm hoping better AMD chips will come from this as they'll have a new fab in NY and more money for R&D.
     
  24. mlupple

    mlupple New Member

    Joined:
    Jun 27, 2008
    Messages:
    209 (0.08/day)
    Thanks Received:
    13
    Location:
    USA
    Switching to Nvidia and Intel from AMD is blind nationalism? This just means I'm not going to be a blind AMD fanboy. I have a 2900XT, and was looking to buy a phenom.... I knew all along they are inferior, i was just a fan.

    Now I have a legitimate excuse to cut the bull.
     
  25. HAL7000

    HAL7000 New Member

    Joined:
    Jul 28, 2007
    Messages:
    263 (0.09/day)
    Thanks Received:
    23
    Location:
    Nashville TN
    This is good news for AMD and their consumers.

    OEM's will start investing again with confidence, with better hardware support for the AMD platform. Kudos to the thinkers at AMD and for ATIC for investing in a company they believe in.

    As for Ruiz....he is like a bad penny that keeps showing up.
     

Currently Active Users Viewing This Thread: 1 (0 members and 1 guest)

Share This Page