AMD said it is giving up its remaining stake in its spin-off manufacturing business GlobalFoundries, which it launched in 2009. The chip maker will pay $425 million to the foundry business to waive the exclusivity arrangement which limited production of its processors to GlobalFoundries’ facilities.
The foundry will now be wholly owned by Advanced Technology Investment Company (ATIC), a technology investment firm led by the government of Abu Dhabi, where a portion of GlobalFoundries’ offices are located, AMD said Sunday.
Despite the new arrangement, both AMD and GloblaFoundries said they will continue to partner together for future chip production.
"Today marks the start of a new era for GlobalFoundries as it becomes a truly independent foundry," said the foundry’s CEO Ajit Manocha. "GlobalFoundries has a clear vision to be the leading semiconductor foundry partner to AMD and one of the world's top technology companies. We continue to execute on our strategy to propel ATIC's long-term investment philosophy into true value creation for our shareholder and customers."
[Related: AMD Reports $177 Million Loss For Q4]
AMD CEO Rory Read had previously attributed the chip maker’s sluggish go-to-market rates for its 32- and 45-nm technologies to “significant” manufacturing setbacks at GlobalFoundries. In his announcement Sunday, however, Read said that AMD “has been pleased” with the foundry’s recent ability to meet its delivery requirements and, like Manocha, stressed a continued commitment to the company.
GlobalFoundries said shipments of AMD’s 32-nm processors increased by more than 80 percent from the third quarter to the fourth quarter and said it’s the only foundry business to have shipped hundreds of thousands of 32-nm High K Metal Gate wafers in 2011. Last month, the company announced plans to invest $3 billion in capital spending to expand its facilities in Singapore, Germany and New York, along with a new parternership with IBM.
AMD expects to record a one-time charge of $703 million in the first quarter of 2012, accounting for the $425 million it will pay out to GlobalFoundries.