AMD splits off manufacturing arm

AMD overnight announced plans to split off its manufacturing operations through a finance deal with a firm from the United Arab Emirates, which will leave AMD with total control of only its design wing.

(Credit: AMD)

The chipmaker confirmed overnight that it had signed an agreement with the Advanced Technology Investment Company (ATIC) of Abu Dhabi to form a joint company that would take over the company's manufacturing interests.

In a conference call, AMD outlined the scheme, which will see an eventual investment from ATIC of US$5.7bn for a 56 per cent stake in the joint venture, which will be called the Foundry Company. AMD will retain the remaining 44 per cent of the new company. AMD has two major plants: one in Dresden, Germany; and another in New York State.

Work has already begun in New York and, according to AMD, investment there will lead to another 1,400 jobs. There will, however, be "a small number of layoffs" as a result of the investment, according to company chief executive, Dirk Meyer.

The initial investment will be US$2.1 billion, of which US$700 million will come from ATIC.

In a statement, IBM welcomed the job creation in New York, a state where IBM itself has considerable investment. The company has a major technology base in nearby Burlington, Vermont.