Smart choice?
On 7th October AMD announced it was going to split the company in two. The chip manufacturing operations, with their money-sapping fabs (semiconductor fabrication plants) will be spun off to form a new company provisionally called The Foundry Company (TFC) in partnership with ATIC - an investment company - and the remainder of AMD will carry on designing marketing and selling CPUs, GPUs and chipsets.
This marked the culmination of AMD's long anticipated ‘Asset Smart' strategy, designed to pay off some of AMD's debts and put it in a better financial position to effectively compete with its main rivals: Intel and NVIDIA.
TFC is starting with 3,000 former AMD employees, the majority of them from the location of AMD's two fabs in Dresden, Germany. TFC's chairman is former AMD CEO Hector Ruiz and its CEO is former AMD senior VP of manufacturing and supply chain management Doug Grose.
On a financial level the merits of the move are clear; AMD gets to pay off over two billion dollars of debt and gets a 44.4 percent stake in a manufacturing operation that is now better able to invest in itself than it was when wholly owned by AMD.
There are still many issues to be resolved before the move can be ruled a success
From left: Waleed Al Mokarrab (ATIC chairman), Doug Grose, Hector Ruiz, Dirk Meyer (AMD CEO), and Khaldoon Al Mubarak (CEO and MD of Mubadala).
