Advanced Micro Devices Inc. (AMD) and Nantong Fujitsu Microelectronics Co. Ltd. (NFME) have signed a definitive agreement to form a joint venture (JV) combining the assembly, test, mark and pack (AMTP) facilities of the two companies.
The JV will utilize AMD’s ATMP facilities and workforce in Penang, Malaysia and Suzhou, China with NFME’s outsourced semiconductor assembly and test (OSAT) technology. The venture will utilize five facilities and about 5,800 employees for differentiated ATMP capabilities and scale to serve a broad range of customers, AMD says. The transaction is expected to close in the first half of next year.
Under terms of the agreement, NFME will purchase 85% share of AMD’s Penang and Suzhou operations and serve as controlling partner for the new combined business. Upon closing, AMD expects to receive about $371 million from NFME and retain 15% ownership of its Penang and Suzhou operations. AMD says the transaction will be cost neutral with significant reduction in AMD capital expenditures.
It also says the JV marks another step in the company’s strategy plan to sharpen its focus on its supply chain operations by reducing capital expenditures aligned with a fabless business model. Devinder Kumar, senior VP, CFO and treasurer at AMD, says in a statement “We continue to sharpen our focus on our ongoing investments on designing differentiated, high performance technologies and products that can drive long term profitable growth. The formation of this JV further strengthens our balance sheet with significant asset monetization.”
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