AMD chip making spin-off launches as Globalfoundries


AMD chip making spin-off launches as Globalfoundries

Warwick Ashford

AMD's silicon chip manufacturing spin-off is launching as Globalfoundries today with the aim of shaking up the industry with a planned next-generation manufacturing plant in the US.

Globalfoundries is the first US-based global semiconductor foundry with headquarters in Sunnyvale, California.

Greater US and European-based competition for Taiwanese chip makers such as TSMC and UMC could lead to lower-cost PCs and other electronic goods.

Heading up Globalfoundries is chief executive Doug Grose, former head of manufacturing operations at AMD, and chairman Hector Ruiz, former chairman of the board at AMD.

"The launch represents a historic day for our industry, one which will permanently change the market landscape by launching the world's first truly global foundry services provider," said Grose.

Globalfoundries, a joint venture between AMD and a government-owned Abu Dhabi investment company, plans to begin building a $4.2bn US manufacturing plant in Saratoga, New York this year.

The company, which will rely initially on its plant in Dresden, Germany, was spun off last year to help AMD with debt accumulated to help its manufacturing division to compete with Intel.

AMD also sold off its handheld chip business for about $65m to Qualcomm and made further job cuts in January to reduce costs in a worsening market.

Abu Dhabi's Advanced Technology Investment Company has invested $1.4bn to get a 65.8% stake in Globalfoundries, leaving AMD with a 34.2% share.

Globalfoundries will concentrate on next-generation 32-nanometer and 28-nanometer manufacturing processes. Production is scheduled to begin in 2010 in Germany and 2012 in the US.

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