Home > Plugged In > Archives > 2008 > October > 07 > Entry
AMD spins off manufacturing operations in Austin & elsewhere (Update 1)
Advanced Micro Devices Inc. is spinning off its semiconductor manufacturing operations, teaming up with an Abu Dhabi high-tech investment firm to create a new company that will take over its factories and related operations in Austin and elsewhere.
In a statement, AMD said it is joining with the Advanced Technology Investment Co. of Abu Dhabi, in the United Arab Emirates, to create a new company called “The Foundry Co.”
Under the joint venture, the new company expects to move forward with plans to build a new manufacturing facility in upstate New York that AMD says will create more than 1,400 jobs. The new firm also will consolidate at least parts of AMD operations in Austin, Silicon Valley, New York and Dresden, Germany.
Spinning off such a significant portion of AMD’s operations will result in “a small number” of layoffs, AMD CEO Dirk Meyer said on a call with analysts and media. He provided no further details. Meyer also noted that about 300 employees at AMD’s offices in Austin, Sunnyvale, Calif., and East Fishkill, N.Y., will join The Foundry Co.
Hector Ruiz, former AMD chief executive and current chairman, will become chairman of The Foundry Co. On the call, Ruiz said he will leave his post at AMD, ending his eight-year tenure with the company.
AMD, which has been struggling in recent years while trying to reduce its manufacturing costs, will get a lot of financial help as part of the deal too. Advanced Technology Investment will invest $2.1 billion to start up The Foundry Co., and the new company will also assume $1.2 billion of AMD’s existing debt.
At least some industry watchers were already applauding the deal early Tuesday.
“Good on AMD for putting together the right partnership,” said technology analyst Roger Kay, president of Endpoint Technologies Associates, Inc., adding that it was a maneuver “worthy of Harry Houdini.”
“It (AMD) gets out from under some of its debt and receives a cash infusion from a patient source,” Kay said.
Dirk Meyer, AMD’s president and CEO, said the unique partnership was assembled and forged by his boss, AMD chairman Hector Ruiz.
“Today is a landmark day for AMD, creating a financially stronger company with a tightened focus,” Dirk Meyer, president and chief executive officer of AMD said in the statement.
Comments
By badsky2k
October 7, 2008 10:52 PM | Link to this
This is really sad. Once again America is selling it’s technologies to foreign interests. We sold our steel making ability to off shore interests and now we are giving away our advantage in high technology. Hector now has done to AMD what he did to Motorola. Ruined the company. I hope that Intel trounces AMD from now on and I also hope that Intel does not sell it’s heart & soul to foreign companies. If they do, then the US will have no edge in the world left except to be the worker bees for everyone else!
By Tom R.
October 9, 2008 1:11 PM | Link to this
What most Americans don’t realize is that if they have skills for HERE and are not so STUCK on staying in America, they can get the same (or more) pay by relocating to a foreign market and step UP their standard of living tremendously. For example, China’s average factory worker gets less than $100/month in U.S. equivalent pay. This is WHY companies produce over THERE (and there are more and more “there’s”). Think of it as an adventure and GO SEE THE WORLD. Take your skills by placing yourself in a good job FIRST and then GO. Either sell your holdings here or rent your house, or have your spouse hold down the fort here until you get settled THERE and then rent or sell it. Just GO…it’s a GLOBAL market and it does NOT belong to America. This is NOT intended to be “unpatriotic”…I love America. I ALSO love the EARTH just as much.
My bet is that AMD Austin will sell its facility on Ben White (71) and will be purchased by either Intel or Samsung.
Go EAST grasshopper!
By badsky2k
October 24, 2008 10:13 AM | Link to this
Tom R… been sucking down the Silane Gas again? What planet are you from anyway? You are so far out in left field we can’t even see you. ET phone home!
What you clearly don’t realize my misguided friend is that this section of AMD has been bought by an Arab financial group. Tom r, ever hear of Dubai? Seen the development going on there? Do you even think that maybe, just maybe they are interested in bringing that technology capability to their side of the pond?
What you CLEARLY don’t understand is a term called strategic technology. High technology is one of the last areas that America still excels at yet like steel, auto & consumer electronics (just to name a few) we (USA) are selling this off also thanks to greed and major mismanagement (check out Hector Ruiz’s resume and the mass destruction he has left in his wake). Hope you enjoy your $100 a month job living in the company dorm and eating at the company cafe… what a life, what an adventure. NO THANKS.