The Foundry Company
AMD is going to transfer all of its manufacturing assets to TFC. This includes its existing world class fabrication plant (Fab 36) in Dresden, Germany, the ground work on a neighboring plant (Fab 38), along with employees and intellectual property, altogether valued at about $1.8 billion for purposes of the deal. ATIC will kick in $2.1 billion when the deal closes, plus from $3.6 billion to $6 billion over five years to bring Fab 38 online ($2 billion), and a new plant, Fab 4X (presumably named by a more punning person than whoever came up with “The Foundry Company"), which will cost about $4 billion. AMD will also be transferring $1.2 billion in debt to TFC.
At closing, AMD and ATIC will own 34.2% and 65.8%, respectively, in economic terms, but have equal voting rights. As ATIC pours money into expansions and new factories, AMD has the option of matching their investment. If AMD would rather not, ATIC’s economic ownership goes up. At 75% and 90%, ATIC gets rights to, under certain circumstances (some at 75%, more at 90%), break a deadlock that results from the evenly split voting shares. ATIC can also trigger a “transition period" after which they can leave the agreement. AMD’s October 7th SEC filing is thin on details here, AMD and ATIC having provided them to the SEC along with the request that they be treated as confidential.
Perhaps of more interest than any other aspect of the deal to those with ties to the US manufacturing industry, Fab 4X will be located in the New York capitol region, directly employing almost 1500 manufacturing workers. There is a lot to this side of the deal, like expecting New York to give TFC the same $1.2 billion in subsidies and incentives they were planning on giving AMD. More on this next.