The Advanced Technology Investment Company (ATIC), owned by the government of Abu Dhabi, will invest $1.4 billion in a entity tentatively called The Foundry Co. and also pay AMD $700 million. AMD will contribute intellectual property rights and also hand over control of two fabrication plants near Dresden, Germany.

ATIC plans to spend between $3.6 billion and $6 billion to redevelop one of AMD's fabrication plants near Dresden and build a new one in New York. The Foundry Co. will also make chips for other companies.

Another Abu Dhabi government investment fund, Mubadala Development Co., said it would pay AMD $314 million for a larger stake in the company. The investment would result in Mubadala owning 19.3 percent of AMD.

In October, AMD reported its eighth consecutive quarterly loss. The company lost $67 million on revenue of $1.78 billion, which was up 14 percent over the same period a year prior.

In November, AMD said it would lay off 500 workers, which followed layoffs of 1,600 workers earlier in 2008.