| AMD's Spin-Off - 10/08/08 @ 8:54 pm - By: MikeC - Source: Browsing |
Investors from Abu Dhabi continue to keep AMD afloat as the chipmaker's manufacturing operations will become a new company majority-owned by the Gulf nation, taking the cost of maintaining factories off AMD's hands.Chipmaker Advanced Micro Devices took the wraps off a long-awaited reorganization on Oct. 8, announcing a plan to spin off its manufacturing operations into a separate company that it will jointly own with investors from Abu Dhabi. The new company, Foundry Co., will be comprised of AMD's (AMD) factories in Dresden, Germany, and one yet to be built in Saratoga, N.Y. Essentially a for-hire factory, Foundry will make AMD chips under contract but also have the freedom to win business from other chip companies. Foundry joins the ranks of such chip foundry companies as Taiwan Semiconductor Manufacturing (TSM); United Microelectronics (UMC), also of Taiwan; Chartered Semiconductor (CHRT) in Singapore; and IBM Microelectronics, a unit of computing giant IBM (IBM). The spin-off helps AMD reduce the high chip-manufacturing costs that, along with a poorly executed acquisition of ATI Technologies, have fueled losses and led to the July removal of CEO Hector Ruiz, who was replaced by Dirk Meyer.
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