AMD pursues assembly and test joint venture

Oct. 16, 2015

AMD on Thursday announced the signing of a definitive agreement to create a joint venture with Nantong Fujitsu Microelectronics (NFME). The company said the venture combines AMD’s high-volume assembly, test, mark, and pack (ATMP) facilities and workforce in Penang, Malaysia, and Suzhou, China, with NFME’s outsourced semiconductor assembly and test (OSAT) facilities to offer differentiated capabilities and scale to service a range of customers.

The value of the transaction is $436 million, and NFME will take an 85% ownership of the joint venture. AMD said it will receive $371 million in cash and expects net proceeds of approximately $320 million, net of taxes and other charges at close. This transaction is expected to close in the first half of 2016, pending completion of regulatory approvals.

AMD said the move is a part of company’s “…ongoing strategic plan to sharpen its focus on designing high-performance technologies and products that drive profitable growth….” The company added that the move “…simplifies our business by fully shifting to a fabless business model that aligns with industry standards of other fabless companies that leverage OSAT manufacturing partners.”

AMD spun off its semiconductor fabrication business as GLOBALFOUNDRIES in 2009. (GLOBALFOUNDRIES in turn acquired Chartered Semiconductor in 2010 and the IBM Microelectronics Division earlier this year.)

The NFME announcement came in conjunction with AMD’s report of its 2015 third-quarter results. The company announced revenue for the third quarter of 2015 of $1.06 billion, operating loss of $158 million, and net loss of $197 million, or $0.25 per share.

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