Mubadala takes ownership of ATIC

Abu Dhabi's Mubadala Development takes control of ATIC, the Government's main technology investment vehicle.

November 14, 2010/ Abu Dhabi / Waleed Al Mokarrab Al Muhairi Chief Operating Officer of Mubadala and Chairman, of ATIC gives a speech during the ATIC Semiconductor Vision Summit in Abu Dhabi November Show more

The Abu Dhabi Government has transferred ownership of its main technology investment vehicle to Mubadala Development in a move that could ease financing for the development of a high-tech manufacturing cluster in the capital.

Advanced Technology Investment Company (Atic)was formed in 2008, shortly before it acquired a majority share in the semiconductor business of the US chip maker Advanced Micro Devices (AMD).

Bringing Atic under the wing of Mubadala, a strategic investment company owned by the Abu Dhabi Government, could be a first step toward helping the company to raise funds from international investors to pay for a planned technology cluster near Abu Dhabi International Airport.

Mubadala is rated by the world's biggest credit agencies and has a track record of selling bonds and raising funds from investors for companies it owns.

"With common executive leadership and the Government of Abu Dhabi as shareholder of both organisations, Atic's integration into Mubadala will further drive the creation of innovative industries for the benefit of Abu Dhabi and the UAE," said Waleed al Muhairi, the chief operating officer of Mubadala and chairman of Atic.

"The development of an advanced technology ecosystem in Abu Dhabi, anchored by the semiconductor sector, is a critical aspect of the Abu Dhabi Economic Vision 2030 framework that guides the emirate's development."

Before the creation of Atic, Mubadala had amassed a stake of more than 8 per cent in AMD, the main competitor of Intel. But the Government decided to deepen the relationship by creating Atic and having it buy a 55.6 per cent stake in AMD's manufacturing business.

Atic spent US$2.1 billion (Dh7.71bn) for the stake and assumed about $1.2bn of AMD debt, according to a statement from 2008.

Mubadala also pledged to more than double its stake in AMD, which is listed in the US. It owned 15.69 per cent of the company as of the end of last March, according to Bloomberg.

The involvement of Mubadala and Atic with AMD has come at a critical time for the company's chip-making and design business. It is struggling with Intel and other players in the industry to stay at the fore as technologies and manufacturing processes evolve and are streamlined.

With the Abu Dhabi Government's help, Globalfoundries, the manufacturing business of AMD and Atic, has made efforts to upgrade and build new plants across the globe.

Globalfoundries has its headquarters in California's Silicon Valley and facilities in the states of Texas and New York, as well as Dresden in Germany.

Atic also bought Chartered Semiconductor Manufacturing of Singapore in late 2009. Chartered owns or has interests in six plants in Singapore, and Atic is planning to combine its operations with Globalfoundries to increase its global scope.

Moving Atic under Mubadala's umbrella will have "no impact" on Atic's management, Mubadala said in a statement. Ibrahim Ajami is to continue as the chief executive of Atic, and Mr al Muhairi will stay as the chairman.

Standard & Poor's Ratings Services said yesterday the credit ratings on Mubadala Development and Globalfoundries Singapore were unaffected by the integration of Atic.