Advanced Micro Devices (AMD) was helped by two Abu Dhabi investment firms with several billion dollars in order to fund its "smart asset" strategy. Thus the path of this company has been changed into a new company called "The Foundry Co." The two investment firms backed by he Persian Gulf state are Advanced Technology Investment Co. (ATIC) and Mubadala Development Co.

In other words AMD and ATIC of Abu Dhabi plan to create a semiconductor manufacturing company to address the growing demand for independent, leading-edge foundry production capabilities. While Mubadala Development Co. will increase its current investment in AMD to 19.3% on fully diluted basis (the company will invest $314 million). AMD will contribute to The Foundry Co. its manufacturing facilities, related assets, intellectual property rights. At the same time ATIC will invest $2.1 billion to purchase its stake in The Foundry Co.

This deal is supposed to shore up AMD's finances and let it focus on the design and development of computer chips.

AMD's shares have lost nearly 44 percent since the start of the year, compared with about 25 percent for the Dow Jones industrials. But AMD's shares increased 31 percent on the news on Tuesday, after Wall Street has waited for months for the struggling chip maker to formulate its so-called "smart asset" strategy aimed at letting the company invest more in developing chips and less in costly factories, according to Reuters.

"From AMD's point of view this is a great time because within this financial turmoil, we can say to our clients and our employees that AMD is a much stronger company," said Emilio Ghilardi, senior vice president and general manager of AMD's sales and marketing activities in Europe, Middle East and Africa.

The deal is still waiting for the U.S. government approval because ATIC is a foreign investment company. AMD expects to gain approval sometime in early 2009.