Chicago (IL) – AMD is getting itself into position to announce a spin-off of the company’s manufacturing business into a separate company. An analyst report this morning suggested that AMD is set to release the news in September, confirming an earlier report by TG Daily. Industry sources reaffirmed to TG Daily today that an announcement of “Asset Smart” is imminent, but noted that an actual separation of product design and production may take years.    

John Lau, an analyst with Jefferies & Co., this morning fueled rumors surrounding AMD’s mysterious Asset Smart strategy, which is widely believed to include a spin-off of AMD’s manufacturing business as well as a major investment of a Middle East company.

Sources told TG Daily that AMD’s top executives recently assembled key manufacturing staff for meetings in the nation’s capital to reveal Asset Smart. Lau noted that AMD’s two fabs in Dresden, Germany, will be spun off into an organization that will produce chips for AMD and other companies. The move will be financed through a $5 billion investment from a “Middle East investment group”, which will be Mubadala Abu Dhabi, according to TG Daily sources. The fact that this firm has a “MAD” shortcut, consisting of the same three letters as AMD, is pure coincidence (you could call this new manufacturing company even MAD AMD.)      

The key questions remain how AMD will go through this reorganization and what will happen to the company’s former CEO Hector Ruiz. Industry sources cautioned us to expect too much from Asset Smart initially since it is not the easiest task to separate a company like AMD into two different entities. Asked whether such a move may take “months”, we were told we should be thinking in a time frame of “years” until a true separation will be reality. Also, there are substantial public perception hurdles with a Middle East investment firm that owns a major stake in a U.S. semiconductor production company, especially if that company will own a major facility outside New York.

As far as Ruiz is concerned, it is generally expected that AMD’s PR may be crafting a graceful exit for the executive, who may be even running the new manufacturing business. However, we also heard that Ruiz is much more available to AMD staff since the announcement. While we have no doubts that Ruiz is working hard to preserve his legacy at AMD, we don’t expect Ruiz to disappear into retirement anytime soon. Our sources indicate that Ruiz in fact may be making his case to run the future manufacturing company.