Abu Dhabi’s ATIC Investing in Chip Plant, Sees Acquisitions

Abu Dhabi’s Advanced Technology Investment Co. is expanding microchip production facilities from New York to Singapore and is seeking to buy companies in other businesses to boost returns for the Persian Gulf sheikhdom, a company official said.

“There are a couple of potential investments” the company is evaluating to diversify beyond semiconductors, Daniel Durn, ATIC’s executive director of investments and strategy, said in an interview in the emirate today. “We are looking for another foundational investment in another sector.”

Abu Dhabi, capital of the United Arab Emirates, is expanding in industries including technology, metals and health care, seeking to reduce its reliance on oil revenue over the next two decades. The emirate entered the semiconductor market in 2009 when ATIC joined U.S.-based Advanced Micro Devices Inc. (AMD) in chip venture Globalfoundries Inc. and then purchased Chartered Semiconductor Manufacturing Ltd.

ATIC, an arm of Abu Dhabi’s government-run investment vehicle Mubadala Development Co., will continue to invest in new semiconductor technologies that will help growth at Globalfoundries, Durn said. Those acquisitions of technologies at an early stage of development will be in the range of hundreds of millions of dollars each, he said.

Increasing Investment

Another investment would establish the company in a new technology segment, he said, without providing detail on what areas it’s targeting. ATIC has already evaluated and rejected three acquisition opportunities in the range of $3 billion to $10 billion, he said.

Globalfoundries will invest about $5.5 billion this year, almost double last year’s outlay, to expand plants in Singapore, Dresden, Germany, and New York state, Durn said. ATIC’s share of the spending will be about $3 billion, he said. As the Abu Dhabi investor continues to spend, it will raise its stake in Globalfoundries to 90 percent by the end of the year and increase it later to as much as 95 percent, Durn said.

Globalfoundries plans to invest $6 billion to $8 billion in a semiconductor plant in Abu Dhabi, ATIC’s Sami Issa, executive director in charge of operations in the emirate, said today. The company is on schedule to break ground on the facility in 2012 and to begin producing microchips there in 2015, he said.

Durn and Issa spoke at an Abu Dhabi presentation by Advanced Micro Devices of its new Llano semiconductor. The chip combines normal personal computer functions with high-quality video, Rick Bergman, AMD’s senior vice president and general manager for products, said in an interview today. There is “no shortage of demand” for the chip among customers, Bergman said.

To contact the reporter on this story: Anthony DiPaola in Dubai at adipaola@bloomberg.net.

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net.

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