AMD and Nantong Fujitsu Microelectronics Co., Ltd. (NFME) today announced that they have closed the transaction to create a joint venture offering differentiated assembly, test, mark, and pack (ATMP) capabilities to both AMD and a broader range of customers. "Combining AMD's world-class teams and facilities in Penang and Suzhou with NFME's expertise in the growing assembly and test market will create a new outsource assembly and test leader with the scale and capabilities to help us deliver our upcoming high-performance technologies and products that can re-shape the industry," said AMD President and CEO Dr. Lisa Su. "The creation of this joint venture marks another step in building a more focused AMD as we complete our transition to a fabless business model, enhance our supply chain operations, and further strengthen our financial position."

"AMD is a world class semiconductor provider with advanced flip chip packaging and test technologies. These capabilities are complementary with NFME's advanced packaging and test technologies, such as its flip chip and bump technology for the computing, communication and consumer market. The establishment of this joint venture will elevate the competitiveness of NFME's flip chip packaging and test technologies to a world-class level. With this joint venture, NFME's advanced packaging and test capabilities will account for 70 percent of its total revenue, leading the entire industry and ranking among the top packaging and test companies in the world," said Chairman of Nantong Fujitsu Mr. Shi Mingda.

Key highlights of the deal include:

• NFME's affiliates have purchased an 85 percent share of AMD's Penang, Malaysia and Suzhou, China ATMP operations and act as controlling partner for the new joint venture business.
• AMD received from NFME approximately $371 million, excluding purchase price adjustments, with net cash proceeds of approximately $320 million after payment of taxes and other customary expenses. AMD retains a 15 percent ownership of the Penang and Suzhou operations.
• The transaction is expected to be cost neutral to AMD's P&L while significantly reducing AMD's capital expenditures. AMD will account for its 15 percent ownership stake in the joint venture and its results of operations under the equity method of accounting.
• Approximately 1,700 AMD employees transitioned to the joint venture.