AMD sells stake to mid-east interests

CHIP-maker Advanced Micro Devices (AMD) has sold an 8.1 per cent stake in the company to the investment arm of the Abu Dhabi government for US$622 million (A$698 million) in cash.

Proceeds from the sale, to the Mubadala Development Company, would be used for general corporate purposes – including the accelerating it long term growth strategy by investing in research and development, product development and manufacturing capability.

Partly to allay US public concerns about Middle East government investment in technology firms, AMD said this was a non-controlling, minority investment and that Mubadala would not receive any board representation as part of the deal.

The transaction did not present a controlling investment or acquisition subject to review by regulatory authorities like the Committee on Foreign Investment in the US (CFIUS), the company said.

“We proudly welcome Mubadala, a world-class investor, to the AMD shareholder family. This investment strengthens AMD’s ability to deliver customer-centric innovation and choice to the marketplace, creating greater value for all of our shareholders,” said AMD Chairman and chief executive Hector Ruiz.

AMD has been in a slump in recent quarters, and the investment is seen as a timely injection of capital to take to its ongoing battle with rival Intel. AMD has lost more than US$1.6 billion so far this year.

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Intel Q2 profit surge

DESPITE its ongoing corporate restructure, chip-maker Intel second quarter profits have jumped 44 per cent to US$1.3 billion (A$1.5 billion), the company said.

Intel said revenue climbed to US$8.3 billion. The results included an US$82 million restructuring charge taken for the uarter.

“Intel's operational execution continued to strengthen, resulting in an outstanding product roadmap and solid year-over-year revenue growth,” Intel president and chief executive Paul Otellini said.

“We're pleased that our efforts to streamline the company are delivering profit growth in excess of revenue growth,’” he said.

And Intel said it expects continued strong growth in the third quarter on the back of a healthy global IT market. The company has forecast revenue growth to US$9 billion to US$9.6 billion, with gross margin up marginally to 52 per cent.

Intel has enjoyed strong sales growth for its quad-core Xeon server processors, but has suffered a slowdown at the low-end of the PC chip market through stiff price competition.

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AMD punts on Transmeta energy technology

CHIP-maker AMD has invested US$7.5 million in ailing semiconductor design firm Transmeta in a deal thought to be aimed at securing energy efficiency technology.

Founded in 1995, Transmeta develops and licenses innovative computing, microprocessor and semiconductor technologies and related intellectual property. The company is a specialist in delivering low power, high performance chip technology.

Most recently Transmeta has focused on developing and licensing our advanced power management technologies.

“We are very pleased that AMD has made a strategic investment in the future of Transmeta,” said Transmeta president and chief executive officer, Les Crudele.

“AMD has long been a leader in the development and delivery of energy-efficient, high-performance computing technologies, standards and initiatives,” Mr Crudele said.

“Transmeta has been proud to endorse and contribute to those industry leading activities, and we look forward to continuing our collaboration with AMD on technology initiatives in the future,” he said.

AMD president and chief operating officer Dirk Meyer said Transmeta has been a key AMD ally in bring the company’s AMD64 technology to market and had supported the industry adoption of both AMD64 and AMD's HyperTransport technology.

“Our investment will support Transmeta's technology development work and AMD's efforts to leverage Transmeta's innovative energy-efficient technologies to the benefit of AMD's customers,” Mr Meyer said.

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Intel approval for $2.5b China chip plant

CHIP-maker Intel has been given approval from authorities to build a US$2.5 billion (A$3.2 billion) fabrication facility in China, local media reported.

China’s top economic planning agency, the National Development and Reform Commission (NDRC), said on its web site that the project to build a factory in Dalian had been approved.

Reports in the US said Intel had not yet announced its intention to build the plant and had declined to comment further.

The NDRC announcement said the Dalian Intel plant would use 90nm (nanometre) fabrication technology most commonly used in mass-production flash memory chips.

Current top of the line Intel manufacturing technology builds chips using 65nm technology, and the company will start production later this year in the US of microprocessors using 45nm technology.

Should Intel go ahead with the Dalian fabrication, the US$2.5 million investment would be one of the largest single foreign investments in the China market.

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