Advanced Micro Devices has appointed a new chairman to replace former CEO and Chairman Hector Ruiz, as it closes the deal to spin off its manufacturing operations.
AMD on Monday announced that Bruce Claflin has been appointed chairman of its board of directors. Claflin replaces Ruiz, who retired from AMD's board. Ruiz is now chairman of the board of The Foundry Company--the chip manufacturing concern that was spun off officially on Monday.
Claflin--who has been a member of AMD's board of directors since August 2003--has held senior positions with IBM and Digital Equipment and most recently was CEO and a member of the board of directors of 3Com. The AMD board also appointed Waleed Al Mokarrab to the board. Al Mokarrab is chief operating officer of Mubadala Development Company, the Abu Dhabi-based firm that is a major investor in The Foundry Company.
Dirk Meyer remains president and CEO of AMD.
AMD also announced on Monday that it has closed the deal to spin off its manufacturing operations to Advanced Technology Investment Company (ATIC) and Mubadala. AMD is billing the foundry as "the world's only U.S.-headquartered semiconductor foundry." Foundry companies, such as Taiwan Semiconductor Manufacturing Co., contract with outside chip design houses to build chips. The AMD spinoff will not only build chips for AMD but also seek business from outside customers.
Upon closing the deal, AMD receives $700 million from ATIC for a portion of its ownership interests in The Foundry Company. The Foundry Company assumes responsibility for the repayment of approximately $1.1 billion of associated AMD debt and Mubadala pays AMD approximately $125 million for 58 million newly issued AMD shares and warrants for 35 million additional shares, AMD said in a statement.
The deal will improve AMD's cash position by approximately $825 million, excluding its consolidation of the operations of The Foundry Company--which has a total "enterprise" value of approximately $4.3 billion. The company is owned 34.2 percent by AMD and 65.8 percent by ATIC.