UAE capital pumps $622m into chipmaker

The government of Abu Dhabi has taken up an 8.1 per cent stake in chipmaker Advanced Micro Devices (AMD).

Under the terms of the deal, AMD will receive roughly $622m from the sale of 49 million shares at a cost of $12.70.

AMD plans to use the cash to fund research and development efforts along with manufacturing operations.

The purchase was made by Mubadala, an investment firm owned by the Abu Dhabi government. Other Mubadala holdings include a shipbuilding business, an aircraft leasing company, and a stake in Dutch automobile manufacturer Spyker.

AMD stressed that the deal would not give Mubadala a controlling stake in the company or allow the firm to take a seat on its board.

The deal will provide a welcome influx of cash to AMD. The company has posted more than $1.9b in losses so far this year as it struggled in the battle with rival Intel.

AMD has spent much of the year playing catch-up as Intel has enjoyed an exclusive market for its quad-core processors.

In September, AMD released a quad-core line that many said was superior to Intel's, only to be bested again in November by the launch of Intel's 45nm Penryn chip. AMD will be releasing a 45nm chip developed in partnership with IBM, Toshiba and Sony sometime in 2008.