Back in August new AMD CEO Dirk Meyer said that the company was “just months away” from spinning off its manufacturing and fabrication business into its own company and this morning it’s official.
The new company, temporarily named the Foundry Company, will be free to manufacture independently for other companies while AMD focuses on chip design.
AMD retains 44% ownership in the Foundry Company and each will assume $1.2 billion of AMD’s debt.
Also announced was that Abu Dhabi-based Advanced Technology Investment Company (ATIC) would inject at least $6 billion into the two companies, mostly to finance a new chip factory in Saratoga, New York, as well as to upgrade one of the Foundry Company’s existing plants in Dresden, Germany.
The investment will give ATIC a majority stake in the Foundry Company with 55.6 percent of its shares.
In attempt to try and make money again for a change after a market loss of 60%, Motorola announced that they will be splitting into two publicly traded entities in 2009.
London-based Nomura analyst Richar Windsor said, “it could be 18 months before it happens, by which time the outlook for either of the businesses could be completely different.”
One of the two companies would be their money-losing mobile phone unit while the other would make set-top boxes and network equipment.
By spinning their mobile phone business into a separate company they may be able find strategic investors such as smaller handset makers in China or Japan eager to get into the US market.