Advanced Micro Devices closes the deal that will spin off its manufacturing business into a separate company temporarily called The Foundry Company. The deal marks the end of an era for AMD, as the chip maker will now outsource its manufacturing of processors used in desktops and notebooks. The official name of The Foundry Company is expected to be announced later in the week of March 2.
has finalized a historic deal that will officially convert
its manufacturing division into a separate business.
As expected, AMD
closed the deal to spin off its manufacturing business on March 2.
temporarily called The Foundry Company, will begin manufacturing a range of AMD
processors, including the Opteron and Turion chip lines.
The new company, which AMD estimates has
an enterprise value of $4.3 billion, is jointly owned by AMD
and the Advanced Technology Investment Company of Abu Dhabi
and will have a
separate management team from AMD.
The move to rid AMD of legacy fabs in Germany
is expected to breathe some new life into the chip maker as it looks to better
compete against Intel for market share in the x86 processor space. The move
to concentrate on microprocessor design and product marketing.
At the same
time, the deal provides much-needed cash for AMD and removes more than a $1
billion from its books.
In an interview Feb. 26, AMD
CEO Dirk Meyer told eWEEK the spinoff deal would change the company's culture,
but the move was necessary to keep AMD competitive against the much larger Intel.
On the day AMD completed the deal, March 2, Intel
announced its own partnership with Taiwan Semiconductor Manufacturing to
produce new platforms and devices for its line of Atom processors.
Meyer said AMD
plans to move ahead with converting its processors from 65-nanometer
manufacturing to 45 nm.
After that, AMD plans to ramp up its line of 32-nm
processors for 2010. AMD could also shift the production of its ATI graphics
processors to The Foundry Company in the future.
Former AMD CEO
Hector Ruiz is leaving AMD to become
chairman of the new company's board of directors. Ruiz is being replaced at AMD
by former 3Com and IBM executive Bruce
Claflin, who will take over as chairman of AMD's
The Foundry Company is expected to announce its official
name later in the week of March 2.