Chip firm Advanced Micro Devices (AMD) will today announce plans to rid itself of the pesky and expensive manufacturing setup it owns and will create a joint venture with the government of Abu Dhabi and other investors.

AMD issued a statement saying it would make a corporate announcement today at 8:00AM in New York, when CEO and president Dirk Meyer will make a prepared statement followed by questions journalists and analysts will ask and which he may or may not answer.

The spun-off manufacturing arm has as its working name the Foundry Company, and AMD will own 44.4%, while the Abu Dhabi investors, under the name Advanced Technology Investment Company, will own the remaining shares. As much as $6 billion may be invested to ensure AMD's Dresden fab will be upgraded, and a new fab built in New York State, near Albany.

The Wall Street Journal believes that the JV will consist of large investments by the government of Abu Dhabi which will also shield AMD from the debt mountain it's incurred in the expensive business of creating "fabs" or factories where slicon wafers are printed with X86 chips. AMD's fab is in Dresden, Germany.

The Journal reckons that Mubadala Development, an Abu Dhabi firm partly owned by the government, and which already owns eight percent of AMD, will put more money in with the spin off having assets of around $5 billion.

The New York Times quoted CEO Dirk Meyer (left)  as saying the announcement was the biggest in its history and would relieve it of the capital burden of constantly building new fabs, which typically cost over $2 billion.

The move is indeed the end of an era. Jerry Sanders III, the founder of AMD, once proclaimed that "only real men have fabs", but that principle has been thrown out of the window, apparently, in favour of Hector Ruiz' "asset lite" strategy. Earlier this year, Dirk Meyer  assumed control of the firm after Ruiz ceded control to him. Meyer was responsible for the development of the Opteron chip which turned round AMD's fortunes in its never-ending fight against chip giant Intel.

The Foundry Company, or whatever it's finally named, will also make chips for other fabless companies, putting it in competition with pure play foundries such as TSMC, Chartered Semi, and UMC.

Essentially, AMD will become a fabless chip manufacturer, rather like Nvidia and Via, and will presumably have access to the Dresden fab facilities. The Foundry Company will relieve AMD of around $1.2 billion in debt, while its technical partnership with IBM Microelectronics will continue until 2015 at least.  The spin-off depends on the agreement of AMD shareholders, and also needs to be ratified by German and US regulatory authorities.  X