AMD to Split Into Separate Design and Manufacturing Companies

AMD, once on top of the world with its Athlon 64 lineup, has been hit hard by Intel ever since the rival chip maker abandoned its infatuation with Netburst and began pushing its Core architecture to much fanfare. Phenom hasn't been the phenomenal success AMD had hoped it would be, and it appears the company has finally reached a crossroads for future operations.

Rather than continue on with business as usual, AMD has chosen another path, one in which the chip maker will be split into two companies, with one staying focused on designing processors and the other setting its sights on manufacturing them. Giving the separated companies a boost, AMD says it will receive at least $6 billion from two Abu Dhabi investment firms, which will mostly go towards financing a new chip factory near Albany and to upgrade the company's Fab in Dresden, Germany.

AMD will own 44 percent of the new entity, which will temporarily be known as the Foundry Company, with the Abu Dhabi government formed Advanced Technology Investment Company owning the rest. ATIC will invest $2.1 billion in the venture right way, with $3.6 billion to $6 billion to be injected later on.

"We generally believe this deal is a game changer for the industry," said Khaldoon Al Mubarak, chief executive of Mubadala. "It's bold, and I think it's smart."

AMD's Dirk Meyer agrees, saying the split will make AMD a financially stronger company. And there's no doubt AMD could use financial relief, who at last count reported it carried a $5.3 billion debt while maintaining only $1.6 billion in cash.

Could this be the boost AMD needs to finally go toe-to-toe with Intel, or is this the beginning of the end? Hit the jump and post your thoughts.

Image Credit: AMD