Microchip manufacturer Advanced Microchip Devices has officially committed to building its proposed $3.2 billion manufacturing plant in Malta, according to an announcement made Tuesday, Oct. 7. It will be doing so with a new structure, however.
Along with news of AMD's commitment came a plan to split the company into two divisions, one dedicated to designing microchips and the other to manufacturing them. The spinoff company is being called the Foundry Company. The decision was called the biggest announcement in our history by AMD's CEO, Dirk Meyer.
In order to build the new Malta plant and upgrade similar facilities in Dresden, Germany, the chipmaker will be relying on a $6 billion injection from two Abu Dhabi investors. Foundry will be run by both AMD and the Abu Dhabi Advanced Technology Investment Company, who will be supplying most of the cash.
The announcement comes amidst dire financial times for AMD, who in the past year has seen several rounds of layoffs and currently reports a $5.3 billion debt. Many speculate the new business plan comes with hopes of catching up to their competitor, Intel.
AMD is expected to gain some financial health back as Foundry assumes $1.2 billion of its debt. The Abu Dhabi investor Mubadala"which bought eight percent of AMD last November"will also be contributing capital by increasing its stake in the pre-split AMD to 19 percent.
The chipmaker will be receiving some help from New York State, as well, in the form of a $1.2 billion incentive package. AMD's construction in Malta is contingent on the transfer of those funds. The plant is expected to bring 1,465 jobs to the region and stimulate growth and job creation in Saratoga County.
Town of Malta Supervisor Paul Sausville acknowledged the investment made at various levels, including the $67 million Saratoga County waterline project, which will sell 3 million gallons of water a day to the plant, but said that the hard work is now paying off.
"It's a culmination of effort from a lot of different people working at the state, county and local level," Sausville said of the announcement, adding that the plant represents a step toward prosperity in the area. "It's going to provide great jobs for young people so they don't have to move away," he said.
AMD's stock, which has declined sharply in the past twelve months, is so far reacting positively to the news, gaining more than 15 percent in the day's first 90 minutes of trading on the New York Stock Exchange.""