AMD has finalized a deal Tuesday to spin off its semiconductor manufacturing operations into a joint company set up with Abu Dhabi investment firm, Advanced Technology Investment Company (ATIC).
The chipmaker said the new entity, called GlobalFoundries, will be headquartered in the United States.
ATIC paid US$700 million for its 65.8 percent ownership, leaving AMD with the rest. Both will maintain equal voting power in GlobalFoundries, while AMD's design wing will remain under its control.
According to AMD, GlobalFoundries has a value of US$4.3 billion, which includes an estimated US$1.8 billion for its manufacturing assets, intellectual property and employees. The spinoff will assume some US$1.1 billion of debt from AMD, as well.
Additionally, AMD received an injection of US$125 million from another Abu Dhabi government investment company, Mubadala Development Company, which will bump up its stake in AMD from 8.1 percent to 19.3 percent. Mubadala will also be represented on AMD's board, following this.
The total injection of US$825 million by the two investment companies will help alleviate AMD's troubled finances. In its fourth quarter closing last year, it reported a 33 percent year-on-year drop in revenue and a US$1.4 billion loss in the quarter.
Separately, rival Intel, made a similar announcement Monday, saying it will outsource the manufacturing of its Atom chips to Taiwan Semiconductor Manufacturing Co. (TSMC).
TSMC, the world's largest contract chip manufacturer, also makes 45-nanometer chips for Sun Microsystems.
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