Text size:

  • Small
  • Normal
  • Large
Abu Dhabi's Atic has totally acquired chipmaker Globalfoundries. Photo by Jeff Topping / The National
Abu Dhabi's Atic has totally acquired chipmaker Globalfoundries. Photo by Jeff Topping / The National

Abu Dhabi's tech fund ups stake in Globalfoundries to 100 per cent

Abu Dhabi’s Advanced Technology Investment Company (Atic) is fully acquiring Globalfoundries, a semiconductor chip maker, as it seeks to grow business from an expanding market of smartphones and mobile gadgets.

??Abu Dhabi’s Advanced Technology Investment Company (Atic) is fully acquiring Globalfoundries, a semiconductor chip maker, as it seeks to grow business from an expanding market of smartphones and mobile gadgets.

The deal, which was announced this morning, means Atic is acquiring the remaining equity stake of nearly 9 per cent in Globalfoundries. That stake was previously controlled by Advanced Micro Devices (AMD), a semiconductor company headquartered in the US.

Acquiring the remaining stake in Globalfoundries is “much more than symbolic”, said Ibrahim Ajami, the chief executive of Atic.

“It enables Globalfoundries to continue to execute on its strategy, which is serving world-class customers, serving leading semiconductor companies in the world and offering them leading-edge technology,” he said.

Some of this gadgetry includes tiny chips, the production of which is being increased to feed a growing demand for smartphones. These technologies are designed to support more graphics and features while consuming less power and providing longer battery life.

Further investing in Globalfoundries gives Atic a deeper foothold in what the company sees as a high-value sector. Atic is a wholly owned subsidiary of Mubadala Development, a strategic investment company is owned by the Abu Dhabi Government.

Prior to the deal, AMD was considered a strategic partner and customer of Globalfoundries.

“Now, in transition, AMD continues to be a strategic partner and important customer – but no longer a shareholder in Globalfoundries,” Mr Ajami said.

In a statement, AMD announced that it had amended its wafer supply agreement with Globalfoundries, where it both agreed to transfer its remaining ownership interest to Globalfoundries and negotiated a wafer price mechanism for this year. AMD also stated that Globalfoundries had waived an exclusivity agreement for AMD to manufacture certain products. As a result, AMD said it had agreed to pay a cash payment of $425 million.

Overall, AMD said it expects to record a one-time charge of $703 million in the first quarter this year, consisting of both the $425 million cash payment and a non-cash charge.

"The amended wafer supply agreement demonstrates that AMD and Globalfoundries remain committed as long-term strategic business partners," said Rory Read, chief executive of AMD, in a statement. "We made significant progress last year to strengthen our relationship, and we're pleased with Globalfoundries' recent performance in meeting our delivery requirements across our product line."

In a separate statement, Globalfoundries' chief executive said, "today marks the start of a new era for Globalfoundries as it becomes a truly independent foundry."

Plans to start building a factory in Abu Dhabi this year were previously delayed, and there is still no specific start-up date for the facility.

“We’re focused on getting it right, and getting all the pieces in place,” Mr Ajami said.

“We will do an evaluation on a timing perspective.

“You have internal forces, customer demand and a lot of the external macroeconomic competitive dynamics – and it’s changing all the time.”

Atic is also planning to launch a new semiconductor research centre in the UAE during the first quarter of next year. 
However, creating a local, robust research and development environment will take “years”, Mr Ajami said.

“We have to build it one brick at a time.”


nparmar@thenational.ae

Back to the top

More articles


Editor's Picks

 The Greens, villas: Q1 no change. 3BR - Dh210-250,000. 4BR - Dh210-260,000. 5BR - Dh220-300,000. Q1 2013-Q1 2014 5% rise. Pawan Singh / The National

In pictures: Where Dubai rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Dubai have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 Above, the private pool of Ocean Heights' five-bedroom penthouse flat. Courtesy Christie’s International Real Estate

In pictures: Penthouse flat is height of Dubai luxury living

A five-bedroom penthouse in Ocean Heights in Dubai Marina is on sale for Dh25 million and comes with a private pool and an unparalleled view of Dubai.

 The cooling towers of the Temelin nuclear power plant near the Tyn nad Vltavou in Czech Republic. The country wants to continue expanding nuclear energy capacity despite cancelling a tender to build two new units. David W Cerny / Reuters

In pictures: Best business images for the week to April 17, 2014

Here are some of the best business images for the week to April 17, 2014.

 A sign points the way to an outdoor market popular with German visitors on the Polish side of the German-Polish border. Sean Gallup / Getty Images

In pictures: A decade since the European Union went east

May 1 will mark 10 years since the European Union expanded east, taking in countries like Poland, the Czech Republic and the Baltic states as new members. And though the border region between Germany and Poland is flourishing with trade and cultural exchange, the open border has also brought a sharp rise in crime.

 The Wind, Energy, Technology and Environment Exhibition takes place from April 14 to April 16. Above, the Dewa showroom during last year’s Wetex. Jaime Puebla / The National

April corporate and economic calendar for the UAE and overseas

From Cityscape to Wetex to stock-market holidays to nations reporting first-quarter GDP figures, here is our helpful calendar of April's business events in the UAE and internationally.

 Get the latest information on credit cards, bank accounts and loan products in the UAE. Mark Lennihan / AP Photo

Rates report: Latest on UAE loans, accounts and credit cards

Souqamal.com brings you the latest interest rates on banking products in the UAE.

Events

To add your event to The National listings, click here

Get the most from The National