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AMD will now own about 34.2% of the spinoff

To say it has been a tough year for the computer industry would be an understatement. AMD has been particularly hard hit, despite being the second largest chipmaker around.

In October, AMD announced that it would be spinning off its chip making facilities into a different company with AMD holding 44.4% of the new chip making company. The spin off resulted in a suit brought against AMD by rival chipmaker Intel over alleged license violations caused by the spinoff of AMD's processor making arm.

AMD announced this week that in an effort to reduce its manufacturing costs and adjust to the current state of the economy it would own even less than the previously noted 44.4% of the chip making spinoff. The majority owner of the spun off chip making division was the Abu Dhabi-based Advanced Technology Investment Company (ATIC) and a minority owner was Mubadala Development.

Amendments between AMD and ATIC will have AMD owning 34.2% of the chip making arm and ATIC grabbing 65.8% of the Foundry. An AMD representative said the sale was due to "changing economic times." AMD is fighting for its survival in the face of falling profits and increased competition. AMD announced this week that it was cutting revenue projections by 25% for Q4 2008.

Other amendments between the owners of the Foundry include a restructured agreement that allows Mubadala to purchase 58 million shares of AMD common stock at a revised purchase price equal to the lower of average closing price per share on the NYSE during the 20 trading days prior to and including December 12, 2008; or the average closing price per share of AMD common stock on the NYSE during the 20 trading days prior to the transaction close date.

AMD released a statement saying, "All other material economic terms of the transaction agreements remain unchanged. ATIC will still invest $2.1 billion to purchase its stake in the Foundry Company, of which it will invest $1.4 billion directly in the new entity and will pay $700 million to AMD."



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RE: My prediction
By 325hhee on 12/9/2008 12:37:15 PM , Rating: 3
Just remember, Nvidia released their GT260 and GT280s, and said they're being priced as low as possible, and they were barely making a profit on those cards.

ATI had a lot of press around their HD4xxx series. And when the 4850s and 4870s came out, and proved their worth, miraculously they had an immediate $100 price drop on the GT280, and then another $50, and another price drop after that. Within a two week time?

So, without ATI, we'd be stuck with Nvidia's $599.99 pricing on high end vid cards, instead of $300. Do you really want that? I don't, I do not have that kind of money to throw around.

Without competition, we'll all be paying apple prices for everything. Come on, look at the hardware they use and the prices they set for their hardware, you can make a PC with the same specs for a few hundred dollars less.


"We shipped it on Saturday. Then on Sunday, we rested." -- Steve Jobs on the iPad launch

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