Advanced Micro Devices shareholders on Wednesday voted in favor of spinning off the company's chip manufacturing operations into a separate company.
The shareholder approval takes AMD a step closer to unloading significant debt and chip manufacturing expenses. AMD has reported consecutive quarterly losses and was looking to spin off its manufacturing arm in an effort to return to profitability.
Shareholders with 50.26 percent of company shares cast a ballot, with 95 percent of those voting in favor of the proposal, an AMD spokesman said. The transaction is expected to close on March 2.
The company last week delayed the vote after the company failed to meet a minimum 50 percent quorum required to approve the transaction. Of around 42 percent of the shares cast then, 97 percent were in favor of the spinoff.
AMD last October announced it would focus on chip design and move its manufacturing arm to a new company temporarily called The Foundry Co. AMD will own a 34.2 percent stake in the spinoff, though original plans called for AMD to have a 44.4 percent stake in the new company. The rest of the company will be owned by Advanced Technology Investment Company, a technology investment firm owned by the Abu Dhabi government.
The new company will assume debt of US$1.2 billion from AMD. Two of AMD's fabrication facilities in Dresden, Germany, will also be transferred to the spinoff.
It will also help AMD focus on designing chips to deliver products that are competitive with offerings from rival Intel. AMD's share in PC processors shipments tumbled to 17.7 percent in the fourth quarter of 2008, compared to 23.1 percent in the fourth quarter of 2007. Intel's market share in processor units shipped was 81.3 percent in the fourth quarter of 2008.