What is the primary purpose of forming "The Foundry Company" (GLOBALFOUNDRIES Inc.)?

The primary purpose is to create a joint venture focused on semiconductor manufacturing. This separation allows AMD to concentrate on its chip design (fabless model) while securing significant capital investment for GLOBALFOUNDRIES to operate and grow its manufacturing capabilities.

What did AMD contribute to the new joint venture?

AMD contributed its German semiconductor manufacturing facilities (Fab 30/38 and Fab 36), associated assets, employees, intellectual property, and certain liabilities to The Foundry Company.

How is GLOBALFOUNDRIES being funded?

ATIC is providing a substantial initial cash contribution of $1.4 billion. Furthermore, ATIC has committed to additional equity funding of $3.6 billion to $6.0 billion over the next five years. AMD has the option, but not the obligation, to contribute additional capital proportionally to its ownership stake.

What is AMD's ongoing relationship with GLOBALFOUNDRIES after its formation?

AMD will be a key customer of GLOBALFOUNDRIES, agreeing to purchase all of its microprocessor unit (MPU) requirements and a growing percentage of its graphics processor unit (GPU) requirements from the new entity under a Wafer Supply Agreement.

AMD 8-K: Leadership Changes, Acquisitions & Dispositions & More

Summary

Advanced Micro Devices, Inc. (AMD) filed an 8-K on March 5, 2009, to report the consummation of a significant transaction involving the formation of a semiconductor manufacturing joint venture, "The Foundry Company," now named GLOBALFOUNDRIES Inc. This venture was established in partnership with Advanced Technology Investment Company LLC (ATIC), a wholly-owned entity of the Government of the Emirate of Abu Dhabi, and West Coast Hitech L.P. (WCH). The transaction involved AMD contributing certain manufacturing assets, intellectual property, and subsidiaries related to its Dresden fabs (Fab 30/38 and Fab 36) to The Foundry Company. In exchange, AMD received Foundry Company securities and ATIC contributed $1.4 billion in cash, receiving Foundry Company securities and convertible notes. The formation of GLOBALFOUNDRIES is a strategic move to separate AMD's manufacturing operations, potentially improving focus and financial flexibility, while securing substantial investment for future growth and operations.

Key Highlights

1AMD has successfully closed the transaction to form a manufacturing joint venture, "The Foundry Company," which has been renamed GLOBALFOUNDRIES Inc.
2The joint venture partner is Advanced Technology Investment Company LLC (ATIC), backed by the Government of the Emirate of Abu Dhabi, contributing $1.4 billion in cash.
3AMD contributed its Dresden semiconductor manufacturing facilities (Fab 30/38 and Fab 36), related assets, and intellectual property to the new entity.
4The transaction involves a complex exchange of securities and debt instruments between AMD, ATIC, and The Foundry Company.
5ATIC has committed to significant future equity funding for GLOBALFOUNDRIES, ranging from $3.6 billion to $6.0 billion over the next five years.
6AMD will purchase its microprocessor unit (MPU) product requirements from GLOBALFOUNDRIES under a Wafer Supply Agreement, and specified percentages of its graphics processor unit (GPU) requirements once certain qualifications are met.
7Hector de J. Ruiz resigned from AMD's board, and Waleed Ahmed Al Mokarrab Al Muhairi, an affiliate of WCH and ATIC, was appointed to fill the vacancy.

ADVANCED MICRO DEVICES INC 8-K Report, Material Agreement (Mar 5, 2009)

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