Advanced Micro Devices and Advanced Technology Investment Company (ATIC) announced on Tuesday that they had obtained clearance from the Committee on Foreign Investment in the United States (CFIUS) regarding the creation of The Foundry Company (TFC), a joint venture between AMD and United Arab Emirates-based ATIC.
AMD will own approximately 34.2% and ATIC will own approximately 65.8% of TFC’s fully-converted common stock. Still, AMD and ATIC will each have equal voting rights at the close of the transaction.
The Foundry Company will commence operations with approximately 3000 employees who will transition into the new company from AMD facilities in Silicon Valley, New York, Dresden, and Austin. The new company’s principal headquarters will be in Silicon Valley and its research and development and manufacturing teams and ecosystems will be based in New York, Dresden, and Austin. After the upgrade and expansion in Dresden and the build-out of the New York facility, The Foundry Company envisions expanding its global manufacturing footprint over time, if commercially justified, to also include new fabrication facilities in Abu Dhabi.
The Foundry Company will be able to make chips not only for AMD, but also for other companies, earning revenues that AMD could not get keeping its fabs exclusive for itself. As a result, other contract makers of semiconductors, such as Chartered, IBM, TSMC and UMC have all reasons to worry as they have just got a very strong rival with technology experience of AMD and financial support from UAE-based investors.
Doug Grose will relinquish his current role as AMD’s senior vice president of manufacturing operations to become chief executive officer of The Foundry Company. Hector Ruiz will relinquish his current role as AMD’s executive chairman and chairman of the board to become chairman of The Foundry Company.
CFIUS also has determined that the proposed additional investment in AMD by Mubadala is not a covered transaction subject to CFIUS review.