Mubadala Development Company, an investment arm of the Abu Dhabi government, has bought an 8.1 percent stake in Advanced Micro Devices.

Mubadala invested approximately $622 million, receiving 49 million newly-issued shares at a price per share of $12.70, the closing price of AMD common stock on November 15, 2007. AMD received approximately $608 million, after reimbursing Mubadala for approximately $14.6 million in expenses.

“AMD is a great fit for Mubadala’s investment approach,” said Khaldoon Khalifa al-Mubarak, chief executive and managing director of Mubadala. “We see significant opportunities for long-term growth and value creation.”

AMD will use the net proceeds from the sale of the shares of common stock for general corporate purposes including accelerating its long-term, customer-focused growth strategy by investing in R&D, product innovations and manufacturing excellence.

“This investment strengthens AMD’s ability to deliver customer-centric innovation and choice to the marketplace, creating greater value for all of our shareholders,” Hector Ruiz, AMD CEO, said in a statement.

In October AMD has reported a strong increase of revenues, but a $396 million loss. AMD posted revenue of 1.63 billion dollars, up 18 per cent from the second quarter and 23 per cent from the third quarter a year earlier.

During the same month, Intel reported a record third quarter earnings. Intel’s net income for the quarter grew 43 per cent to 1.86 billion dollars, or 31 cents per share, up from 1.30 billion dollars, or 22 cents per share, a year ago.

Also earlier this week Intel announced the launch of Penryn chip range, a move that will put AMD in disadvantage.

The new chips are based on 45 nanometer technology and the purpose of their design is to increase the processing power and to reduce the consumption of energy. AMD‘s range of 45 nanometer chips will be launched in 2008.

AMD is expected to launch the "Spider" platform, which includes the next-generation 65-nm quad-core Phenom processor, which was unveiled in August this year.