Thursday, February 19, 2009

AMD spin-off gets OK

MALTA — After a week of some doubts, shareholders of Advanced Micro Devices Inc. approved the spin-off of the company's manufacturing operations Wednesday, paving the way for construction of a $4.6 billion computer chip factory here.

AMD needed the OK to create a joint venture with an investment fund owned by the Emirate of Abu Dhabi known as the Advanced Technology Investment Co. The move also includes an infusion of cash from the oil-rich city state that will stabilize AMD's finances.

The joint venture, currently being called The Foundry Co., will make computer chips for AMD and other companies using AMD's two existing chip fabs in Dresden, Germany. It is also planning to expand its manufacturing capabilities by building a third fab at the Luther Forest Technology Campus in Malta that would employ 1,465 people. Initial ground-clearing on a 222-acre site is slated to begin next month.

The approval has been in doubt since last week after fewer than 50 percent of the company's shares were voted during the regularly scheduled shareholder vote on the spin-off. Such a quorum is required to make the vote official.

The vote had been adjourned until Wednesday, when AMD was able to obtain a razor-thin margin of 50.26 percent of the shares to be cast. Of those, an overwhelming 94 percent voted in favor of the plan.

Now AMD says it expects to close the deal by March 2, just two weeks before it wants to start initial tree and soil clearing at Luther Forest.

"AMD did not have a plan B," Malta Town Supervisor Paul Sausville said. "They voted, and shareholders obviously understood the importance of this to their business."

Now starts the meticulous process of site plan approval by the Malta Planning Board, which will meet next Wednesday to continue reviewing plans for the chip fab, which were submitted to the town earlier in the month.

Sausville said the Town Board will discuss hiring a project management firm to help the town oversee the project during its Monday meeting. AMD is funding that hiring, although AMD spokesman Travis Bullard said the project manager will have total autonomy and will get its direction from the town, not AMD.

"They'll just send us the bill," Bullard said.

Sausville said the project manager will keep the town on top of needed approvals and project requirements. He noted that the lost opportunity costs on a $4.6 billion project come out to $300,000 for each day the project is delayed.

Sausville said there are other small yet important details that must get taken care of before the chip fab can get its certificate of occupancy from the town, scheduled for 2011.

The zoning law that covers the fab requires 7.5 miles of pathways and trails be constructed at Luther Forest and that those trails be connected with existing public trails in the towns of Malta and Stillwater, including the Zim Smith Trail, a major trail that runs through Saratoga County.

A $100,000 state grant given to the nonprofit Saratoga PLAN to design an extension from the Zim Smith to Luther Forest has been held up due to government red tape.

"This is just one of several issues that could be problematic for the project," Sausville said.

Bullard, the AMD spokesman, said some of that trail work at Luther Forest will be done this spring.

"It shouldn't be an issue," he said. "A lot of that stuff is under way."

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