Microchip manufacturer Advanced Micro Devices has officially committed to building its proposed $4.5 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.
The cost of the facility increased from $3.2 billion because its size was scaled up from the original plans during negotiations with the Town of Malta.
In order to build the new Malta plant and upgrade similar facilities in Dresden, Germany, the chipmaker will be relying on $6 billion from two Abu Dhabi investors. Foundry will be run by both AMD and the Abu Dhabi Advanced Technology Investment Company, which will be supplying most of the cash.
The announcement comes amid dire financial times for AMD, which 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 the 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 8 percent of AMD last November and is owned by the government of Abu Dhabi " 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.