January 06, 2009 AMD plan hinges on federal OK Progress also depends on company shareholders' approval
By DREW KERR
MALTA - Officials with Advanced Micro Devices have a New Year's resolution: Bring their ambitions to build a computer chip factory in Saratoga County to fruition.
Two obstacles remain -- shareholder approval and the acceptance of the deal by the U.S. Treasury Department.
AMD officials say they hope to overcome both early this year, allowing the company to close on a new business partnership with the Advanced Technologies Investments Co.
In October, executives with the Abu Dhabi-based Advanced Technologies Investments said the company would infuse the cash-strapped AMD with capital so it could go ahead with plans for a $4.6 billion factory at the Luther Forest Technology Campus.
Together, the companies are forming a business called The Foundry Co., which would oversee construction of the new plant.
The foreign company's involvement has prompted a review by the U.S. Treasury Department's Committee on Foreign Investment in the United States.
The committee, now led by Treasury Secretary Henry Paulson, vets business deals with extensive foreign interests and weighs their national security implications. Representatives from Homeland Security, the State Department and the Defense Department also sit on the committee.
A spokesman for the Treasury Department said Monday that government officials by law cannot reveal where a particular project is in the review process.
The committee has 30 days to review an application and is allowed another 45 days to investigate it, if necessary. If forwarded to the president, a decision must be made within 15 days.
AMD spokesman Travis Bullard said Monday the company submitted its plans when it announced the partnership on Oct. 7. But he said the committee might not have immediately started its review.
Bullard said the company has been given no indication when approval may come, but it is expected "shortly."
A date for a vote by shareholders has also not been set, Bullard said.
In a filing with the Securities and Exchanges Commission, AMD set a March 7 deadline for closing on the deal.
Bullard said the date could be renegotiated if the deadline is not met.
In the interim, at least one federal official has expressed reservations about the project. U.S. Sen. Jon Kyl, R-Ariz., recommended in a letter to the Treasury Department that the deal be rejected.
Kyl, whose state hosts major operations for AMD rival Intel, said technology AMD produces -- particularly that with military applications -- could end up in the hands of "dangerous regimes" such as Iran because of lax export laws in the United Arab Emirates.
"I believe that there are a number of serious issues that require thorough vetting to guarantee this transaction does not pose a risk to U.S. national security," Kyl wrote, according to a report in The Washington Times.
Several messages left seeking comment from Kyl were not returned on Monday.
Bullard called Kyl's objections a "non-issue."
The company has a program in place to enforce compliance with export laws, he said. The federal review follows months of work by state and local officials to transfer the state's $1.2 billion incentive package. The financial aid, originally offered to AMD, is now being offered to AMD Fab Technologies USA, the domestic arm of the Foundry Co. The final approvals for the transfer were given in December.
Company officials have said they could break ground at Luther Forest as early as this summer.
