Computer chip maker AMD announced on Monday that it plans to spin off its semiconductor business as a new company dubbed The Foundry Company. The company called the move part of a plan to address "the growing global demand for independent, leading-edge semiconductor manufacturing."
The split will be sponsored in part by Advanced Technology Investment Company (ATIC). ATIC plans to invest US$2.1 billion to start get The Foundry Company off the ground, which will give it a 55.6 percent share of the new chip business. ATIC has also committed to investing between $3.6 and $6 billion over the next five years.
AMD claimed that the company split will help it keep focused on its primary business interests while allowing its semiconductor arm to grow independently. If it the plan works the way AMD hopes, it will also be able to boost its profits.
The deal is awaiting U.S. government approval because ATIC is foreign investment company. AMD expects to gain approval sometime in early 2009.