AMD To Split Into Two Companies

Advanced Micro Devices, one of Austin's largest tech employers, entered a new phase of its history today by announcing that it would split into two companies: one focused on designing microprocessors and the other on manufacturing them.

The new manufacturing company, called the Foundry Company, will be a joint venture between AMD and two Abu Dhabi investment firms that have agreed to finance the building of a new chip factory near Albany, New York, and to upgrade the one of the company’s existing plants in Dresden, Germany.

By doing both the design and manufacturing of chips, AMD had taken a financial hit each time a new smaller chip needed to be producted. Most companies have created manufacturing partnerships or outsource the building of their chips to another company.

“This is the biggest announcement in our history,” said AMD’s chief executive, Dirk Meyer. “This will make us a financially stronger company, both in the near term and in the long term, as a result of being out from the capital expense burden we have had to bear.”

Former AMD chairman and CEO Hector Ruiz will leave the company and become chairman of the Foundry Company.

AMD employs around 2,700 people in Austin. The Statesman reported that Meyer said spinning off such a significant portion of AMD’s operations will result in “a small number” of layoffs. Meyer also noted that about 300 employees at AMD’s offices in Austin, Sunnyvale, Calif., and East Fishkill, N.Y., will join The Foundry Co.