AMD has spun out its semiconductor manufacturing activities in a joint venture with the Advanced Technology Investment Company (ATIC), an investment company formed by the government of Abu Dhabi.

AMD, which is in a head-to-head microprocessor battle with Intel, the world’s largest chip maker, is spinning off its manufacturing activities to save operational costs and also to clear debt from a portion of the proceeds.

ATIC will invest $2.1bn to purchase its stake in the venture to be called the Foundry Company. It will also invest a minimum of $3.6bn and up to $6.0bn over the next five years to fund the expansion beyond manufacturing facilities initially contributed by AMD.

The Foundry Company will also assume approximately $1.2bn of AMD’s existing debt.

The venture includes AMD’s two fabrication facilities in Dresden, Germany, as well as related assets and intellectual property rights. There are plans to upgrade of one of the Dresden fabs and to start construction of a new facility in Saratoga County, New York.

The venture will compete for chip making business on the wider market with existing founders TSMC, UMC and Chartered Semiconductor.   

The new venture will join the IBM technology alliance for access to next generation 32nm and 28nm process technology. NEC, Chartered Semiconductor Manufacturing, Freescale, Infineon Technologies, Samsung Electronics, STMicroelectronics and Toshiba are already members of that alliance.

See also: Electronics Weekly's focus on x86 microprocessors, a roundup of content related to x86 microprocessor technologies and developments.

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