Infrastructure // PC & Servers
04:18 PM

AMD Stockholders Approve Manufacturing Operations Spin-Off

The joint venture with ATIC is expected to reduce AMD's costs and allow it to focus on designing rather than making microprocessors.

Shareholders of Advanced Micro Devices have approved the spin-off of the chipmaker's manufacturing operations, which is expected to reduce costs by focusing AMD's efforts on designing rather than making microprocessors.

As a result of Wednesday's approval, AMD is expected to close the deal with Advanced Technology Investment Co., formed by the Abu Dhabi government, March 2. The two companies last year agreed to form a manufacturing joint venture, temporarily called the Foundry Company.

Last week, AMD postponed a shareholder meeting after the company failed to meet the required 50% quorum. The company in the second go-around managed to gather 50.26% of the shares eligible to vote.

Under the joint venture, ATIC will get a 65.8% stake in the manufacturing company, and AMD a 34.2% share. The companies, however, will have equal voting rights. ATIC will pay $2.1 billion for its stake, with $1.4 billion going directly into the joint company and $700 million to AMD.

The deal is seen as critical in helping AMD cut costs following a string of quarterly losses that have amounted to several billion dollars. Last month, AMD reported a loss of $1.4 billion in the fourth quarter of last year, which was narrower than the same period the year before.

Revenue, however, fell 33% from a year ago, as the chipmaker was hit hard by the slump in the PC market caused by the economic downturn.

Each year, InformationWeek honors the nation's 500 most innovative users of business technology. Companies with $250 million or more in revenue are invited to apply for the 2009 InformationWeek 500.

Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
Server Market Splitsville
Server Market Splitsville
Just because the server market's in the doldrums doesn't mean innovation has ceased. Far from it -- server technology is enjoying the biggest renaissance since the dawn of x86 systems. But the primary driver is now service providers, not enterprises.
Register for InformationWeek Newsletters
White Papers
Current Issue
Top IT Trends to Watch in Financial Services
IT pros at banks, investment houses, insurance companies, and other financial services organizations are focused on a range of issues, from peer-to-peer lending to cybersecurity to performance, agility, and compliance. It all matters.
Twitter Feed
InformationWeek Radio
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.