ID :
23231
Wed, 10/08/2008 - 15:15
Auther :
Shortlink :
https://oananews.org//node/23231
The shortlink copeid
AMD, ATIC to create new semiconductor manufacturing company
Abu Dhabi, Oct 8, 2008 (WAM) - AMD [NYSE: AMD] and the Advanced Technology Investment Company (ATIC) of Abu Dhabi yesterday 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 US$2.1 billion to purchase its stake in The Foundry Company, of which it will invest US$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 US$1.2 billion of AMD's existing debt.
ATIC has committed additional equity funding to The Foundry Company of a minimum of US$3.6 billion and up to US$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 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 to 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.
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 US$1.2 billion in debt, ATIC's US$700 million payment to AMD for ownership interests in The Foundry Company and Mubadala's US$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 US$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.
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 US$2.1 billion to purchase its stake in The Foundry Company, of which it will invest US$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 US$1.2 billion of AMD's existing debt.
ATIC has committed additional equity funding to The Foundry Company of a minimum of US$3.6 billion and up to US$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 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 to 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.
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 US$1.2 billion in debt, ATIC's US$700 million payment to AMD for ownership interests in The Foundry Company and Mubadala's US$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 US$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.
