Competitive Focus, AMD Separate Business Unit
Sep
15
NEW YORK? “Microprocessor manufacturer Advanced Micro Devices (AMD) plans to split operations into two companies working business unit to compete with its main rival Intel.
AMD will split the company into two, where one company will focus on the production and microprosesor other companies just take care of the design.
As quoted by the New York Times, Tuesday (7/10/2008), AMD will also receive an injection of fresh funds at $ 6 billion from two Abu Dhabi-based company, Advanced Technology and Mubadala Development Company, to support the company’s separation plan. Most of the funds would be allocated to build a new microprocessor plant in Albany, New York, and to develop other factories that have stood in Dresden, Germany. Later, AMD still has the right to control approximately 44.4 percent of the total company shares.
Previously, Advanced Technology has promised to disburse funds EUR 2.1 billion to AMD and will raise funds EUR 3.6 to 6 billion to build the microprocessor manufacturer. Meanwhile, the Mubadala Development Technology, which currently has eight percent of the stock AMD plans to increase its share ownership to 19.3 percent by pumping additional funds worth USD 314 million.
“This announcement is the largest in the history of our company, this separation will make us stronger both financially in the near and long term,” said the CEO of AMD, Dirk Meyer after the mutual separation plan.
As a manufacturer of microprocessors, AMD continues to innovative efforts to shift the position of Intel’s still leading the market. AMD expects the investment from the middle eastern companies that can overcome obstacles AMD’s lack of funds.
Responding to the separation plan of the factory unit, Advanced Technology expressed optimism about the future of AMD.
“This step is part of the business cycle and is always directed toward the top,” said Chairman of Advanced technology, Waleed al-Mokarrab.
The transaction is expected to be completed early in 2009. However, these investments still have to pass regulatory approval, and the government of New York and Germany, the location where the factory is planned.