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AMD foundry spin-off gets green light

Posted: 20 Feb 2009 ?? ?Print Version ?Bookmark and Share

Keywords:AMD foundry spin-off? shareholder approval? fab?

Advanced Micro Devices Inc. shareholders have voted to approve the proposed spinout of its manufacturing operations into a separate foundry company.

Separately, an AMD executive who will play a prominent role in the spin-off foundry provided details of the new company's strategy, including its initial focus on 65- and 45nm technology.

Stockholders approved the proposal to issue common stock and warrants to an affiliate of Mubadala Development Company PJSC, paving the way for AMD and the Advanced Technology Investment Co. (ATIC) of Abu Dhabi to create The Foundry Co., AMD said.

With the stockholder approval, all closing conditions for the creation of the manufacturing joint venture have been met, and the transaction is expected to close by March 2, AMD said.

Last week, AMD postponed its stockholder meeting and vote on the spin-off so that it could solicit more proxies on the proposal. The proposal needed to be voted on by at least 50 percent of AMD's outstanding shares. As of Feb. 10, only 42 percent had been voted, AMD said.

AMD did not disclose the final voting tally. As of Feb. 10, 97 percent of the votes cast had been in support of the proposal, according to the announcement.

The company announced last October it would split off its manufacturing operations into a foundry joint venture with ATIC.

Under the current plan, AMD will own a 34.2 percent of the Foundry Co. The original plan had been for AMD to own 44 percent of the venture.

Target: 32nm
The new foundry spin-off is not going after older technology. Initially, it will provide 65- and 45nm processes for its main customer: AMD.

But over time, the spin-off's charter will become clearer: It will look for foundry customers beyond AMD. And going forward, the foundry spin-off will focus on "early adopters for 32nm," said Craig Sander, VP of process R&D at AMD. Sander will assume a similar role at the foundry spin-off.

"32nm is probably a starting point for us," Sander said in a recent interview.

Last October, the foundry spin-off became the latest member in IBM's "fab club." The spin-off will gain access to IBM's common platform technology, including its 32nm technology. The 32nm process, to ship by year's end, includes high-k and metal gates.

In other words, the foundry spin-off will compete against UMC, TSMC and others. To some degree, it will also compete against the foundry members of IBM's "fab club," such as Chartered and Samsung.

Sander acknowledged that the foundry market is overcrowded, but he said there is room for another competitor, especially at the high-end.

"There is room for a company that can deliver" high-quality technology, he said.

The Foundry Co. will initially make use of one fab, with possibly two more in the works. The main plant for the spin-off is Fab 36 in Dresden, Germany. That 300mm fab is currently making 65- and 45nm processors for AMD.

AMD also owns Fab 38 in Dresden. That fab was formerly a 200mm plant. The plant has a shell, but it is not equipped with tools. It is unclear if the spin-off will use that fab over time.

In 2006, AMD said that it planned to build a 300mm plant in upstate New York. The 300mm fab, to cost $3.5 billion, is expected to be located in the Luther Forest Technology Park in Saratoga County in upstate New York.

To prepare for the fab, the state of New York has already invested millions of dollars in terms of infrastructure. The Foundry Co. plans to make use of this fab, which could ramp by mid-2012, Sander said.

- Mark LaPedus, Dylan McGrath
EE Times





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