SAN JOSE, Calif. - Abu Dhabi's Mubadala Development Co. has acquired Advanced Technology Investment Co. (ATIC), the parent of Globalfoundries Inc.
ATIC will become a wholly owned business of Mubadala. In 2002, Mubadala-the Arabic word for ''exchange''-was established by the Government of Abu Dhabi, ''with a mandate to facilitate the diversification of Abu Dhabi’s economy.''
Mubadala is an investment arm. It brings together and manages a multi-billion dollar portfolio of local, regional, and international investments and partners with leading global organizations to operate businesses across a wide range of industry sectors including aerospace, energy, healthcare, industry, information communications and technology, infrastructure, real estate and hospitality.
Mubadala played a key role in launching ATIC in 2008, ''as an element of Abu Dhabi’s long-term strategy to diversify its economy through investments in high-technology sectors.''
In 2009, the chip-manufacturing arm from Advanced Micro Devices Inc. (AMD) was spun off into a new foundry company. The foundry spinoff, Globalfoundries, become a joint venture between AMD and Abu Dhabi's ATIC. At the time, AMD moved to become a fabless chip maker.
In September, ATIC agreed to acquire Singapore-based Chartered Semiconductor Manufacturing Co. Ltd. for a total of $3.9 billion. Chartered has been folded into Globalfoundries.
As part of a recent and complex transaction, AMD reduced its stake in GlobalFoundries from about 30 percent to 14 percent. In the deal, ATIC now owns 86 percent of GlobalFoundries, a U.S.-based silicon foundry vendor. Previously, ATIC owned 70 percent.
According to Mubadala, today’s announcement will have no impact on the management, day-to-day operations or business plans of ATIC or its Globalfoundries subsidiary. Investment plans for Globalfoundries facilities remain unchanged. Ibrahim Ajami will continue to lead ATIC as its CEO. As chief Operating officer of Mubadala, Waleed Al Muhairi will continue his ''deep involvement'' with ATIC, where he is chairman.
Globalfoundries, a newcomer in the foundry industry, has recently picked a fight with TSMC, UMC and others. Perhaps ATIC is over its head in the arena and Mubadala has stepped in to help. Mubadala has a much broader portfolio and more experience in management.
Foundry Globalfoundries plans to double its capital spending in 2011 to $5.4 billion. It is also building a 300-mm fab in New York. ATIC wants to build a fab in Abu Dhabi and is reporting evaluating fab construction contractors.
But rival Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) recently raised its capital spending. TSMC expects 2011 capital expenditures to be about $7.8 billion in 2011. TSMC's original capital spending budget was about $6 billion for this year, according to analysts.
Another rival, Samsung Electronics Co. Ltd., is also boosting its foundry spending.