Saratoga County

AMD ballot succeeds on second try

The second time proved the charm for Advanced Micro Devices and its plan to build a $4.6 billion com
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The second time proved the charm for Advanced Micro Devices and its plan to build a $4.6 billion computer chip factory where about 1,465 people will work.

On Wednesday, a week after failing to get a quorum in its first try, a second AMD shareholder meeting in Austin, Texas, approved a deal with two Abu Dhabi investment funds — a deal providing money for construction of the plant at the Luther Forest Technology Campus.

Shareholder approval was the last significant hurdle for the arrangement, which was announced in October. The deal is expected to close by March 2.

Plans include creating a new manufacturing company, temporarily called The Foundry Co., that will take over AMD’s manufacturing assets, including the facility proposed for Luther Forest.

The restructuring will take AMD itself out of the expensive chip manufacturing business, which has contributed to AMD’s heavy financial losses over the past two years.

The plant will use cutting-edge technology, officials said. The Foundry will be free to sell chips to other customers as well as AMD.

“We have now received all the necessary approvals to finalize our ‘asset smart’ transaction and move forward with the creation of The Foundry Co.,” said AMD spokesman Travis Bullard. “At this point, the parties are in the process of completing the closing documentation, and we expect that the transaction will close by March 2.”

AMD officials said 50.26 percent of the company’s 608 million shares were represented in person or by proxy at Wednesday’s shareholder meeting; of them, 94.5 percent voted in favor.

The shareholder vote was originally scheduled for last Tuesday but had to be postponed when the owners of only 42 percent of shares had voted up until then.

Bullard said AMD and the two Abu Dhabi funds can now finish legal documents and transfer money.

The closing will be followed quickly by announcements about the new manufacturing company’s permanent name and the purchase of 222 acres at the plant site on the Malta-Stillwater town line. The property is big enough to eventually hold three chip fabrication plants.

“There will be a lot of things happening in the next couple of weeks,” Bullard said.

The new company will be 65 percent owned by the Advanced Technology Investment Corp. of Abu Dhabi, a government-owned sovereign wealth fund, but it will be U.S.-headquartered, with 3,000 AMD employees moving to the new company’s payroll.

As part of the overall transaction, another Abu Dhabi firm, Mubadala Development Co., will be increasing its ownership stake in AMD from 8 percent to 19 percent through share purchases.

ATIC will immediately invest $2.1 billion in cash and $3.6 billion to $6 billion more over the next five years, propelling plans for the Luther Forest plant forward.

The company wants to begin clearing land as soon as next month and start construction this summer.

“It will be in March or maybe April, depending on things like the weather,” Bullard said.

Local officials are pleased the plans have cleared a critical hurdle.

“I’m excited they finally made the choice to come to Malta, and Malta is gearing up to meet the challenge,” said Town Supervisor Paul Sausville. “They are a very high-achieving organization, the best and brightest.”

The Town Board plans to name a town-employed manager to oversee the plant’s development over the next three years. AMD will pay for the manager through an escrow account.

Once the factory starts production in 2012, it is expected to employ about 1,465.

Bullard said an announcement naming the general construction contractor, who will employ more than 1,000 people, should come quickly after the March 2 closing.

Major hiring for the plant won’t start until 2011, but Bullard said about 60 percent of the work force will be manufacturing technicians who will be hired locally. Plant start-up will be handled for the most part by AMD employees transferred in who have been through the start-up process before, he said.

AMD stock rose immediately at the announcement, then fell and closed for the day at $2.21 per share, down 6.3 percent.

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