Dubai, Oct 7 (IANS) Leading American chip maker Advanced Micro Devices (AMD) has spun off its manufacturing facilities to a United Arab Emirates (UAE)-based company to create a new semiconductor manufacturing firm.
Advanced Technology Investment Co (ATIC) of Abu Dhabi and AMD Tuesday announced the creation of a new US-headquartered company, temporarily named The Foundry Co (TFC), to meet demand for independent and leading-edge foundry production capabilities.
Under the deal, AMD will contribute to TFC its manufacturing units, including two fabrication facilities in Dresden, Germany, as well as related assets and intellectual property rights, the state-run Emirates News Agency (WAM) reported.
Formed this year and wholly owned by the Abu Dhabi government, ATIC is focused on making investments in the advanced technology sector, both locally and internationally.
Simultaneously with the new deal, the Abu Dhabi government's investment vehicle Mubadala more than doubled its stake in AMD from the existing 8.1 percent to 19.3 percent.
ATIC will invest $2.1 billion to purchase its stake in TFC, 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 TFC.
TFC, which will be headquartered in the Silicon Valley, will also assume approximately $1.2 billion of AMD's existing debt.
'We are as enthusiastic about AMD's potential today as we were when we made our initial investment last year,' Mubadala chief executive and managing director Khaldoon Al Mubarak said.
Describing AMD and ATIC as ideal partners, chairman of AMD's board of directors Hector Ruiz said: 'Working together allows us to combine ATIC's long-term vision and patient capital with our manufacturing leadership, innovation and highly-skilled workforce.'
Additionally, ATIC has committed equity funding to TFC of $3.6 billion-$6 billion over the next five years to fund the expansion of TFC's chip-making capacity.
These funds will be used for capacity expansion at its facilities in Dresden and construction of a new state-of-the-art facility in Saratoga County, New York.
The New York facility is expected to create over 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 US.
The board of directors of TFC will be equally divided between representatives of AMD and ATIC.
AMD will own 44.4 percent and ATIC will own 55.6 percent of TFC's fully-converted common stock upon its formation.