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The End of An Era: AMD Splitting Up, Intel Wins

AMD is set to announce that it will split up in two separate entities in a bid to reduce its worryingly large outstanding debt by getting a substantial foreign cash investment in its ongoing rivalry against Intel.

Reuters (opens in new tab) reports that two state-owned venture capital entities from Cash/Oil Rich Abu Dhabi will invest a whopping USD 6 billion to create a spin-off foundry company and accelerate AMD's bold move to become asset smart.

The new foundry company - called... The foundry company - will benefit from more funds over the next five years to build a new chip fabrication unit in New York and to upgrade AMD's existing fab in Dresden, Germany.

This will allow the company to focus its resources on creating better CPUs and hope for better days. AMD has lost nearly 90 percent of its share prices since its heydays back in 2006 when it launched its popular Opteron Range.

The news of AMD's newly found investors caused its share to surge by more than 34 percent this morning, a rare good news in today's market turmoil.

The company took a USD 880 million write down back in July related to the challenging acquisition of Canadian graphic chip manufacturer ATI.

AMD has been an underdog to bigger and bolder Intel and has been hit by a string of malfunctions in the recent months with delays hitting its flagship Opteron and Phenom Range coupled with a resurgent and more aggressive Intel which owns 80 percent of the world's CPU market.

It will remind the older generation of the 20-year battle between the bantam cock and the heavy weight champion (ed: Chimpzilla and Chipzilla) which left many, many casualties like Cyrix, IDT or Nexgen around.

The various Abu Dhabi investment funds have been pretty savvy recently having bagged a substantial stake in Citigroup for USD 7.5 billion and engaging in a number of other financial ventures.

Désiré Athow
Contributor

Désiré has been musing and writing about technology during a career spanning four decades. He dabbled in website building and web hosting when DHTML and frames were en vogue and started writing about the impact of technology on society just before the start of the Y2K hysteria at the turn of the last millennium. Following an eight-year stint at ITProPortal.com where he discovered the joys of global tech-fests, Désiré now heads up TechRadar Pro. Previously he was a freelance technology journalist at Incisive Media, Breakthrough Publishing and Vnunet, and Business Magazine. He also launched and hosted the first Tech Radio Show on Radio Plus.