AMD finally pulled the "asset lite" ripcord like it's been threatening to do for over a year and said early Tuesday morning that it's spinning its manufacturing off into a joint venture with the oil-rich sheikdom of Abu Dhabi.

The transaction, aimed at making the battered AMD financially viable, will mean that a Middle Eastern power owns 55.6% of what they're calling for the moment "The Foundry Company" and 19.3% of AMD itself, which will design and sell the chips that the Foundry makes.

The Foundry Company is also supposed to seek manufacturing contracts from other companies. According to the press release, it "aspires to drive the next round of innovation in this industry."

In return for its interests, AMD will get $700 million from the Advanced Technology Investment Company (ATIC), a sovereign wealth fund created this year by the government of Abu Dhabi.

It will get another $314 million from the Mubadala Development Company, the investment arm of the Abu Dhabi government that poured $622 million into AMD late last year. The new investment ups its stake from 8% to 19.3% and buys it a board seat.

AMD also gets to shift $1.2 billion of its debt to the Foundry, improving its liquidity as well as its net cash position.

ATIC is supposed to put $1.4 billion directly into the Foundry. It will also put at least another $3.6 billion in equity funding into the joint venture over the next five years and maybe as much as $6 billion.

ATIC will increasingly own more and more of the Foundry the more money it puts in unless AMD matches future capital infusions.

The immediate money is supposed to ensure that a second existing AMD plant in Dresden is converted to 300mm and that that prospective "4X" AMD factory in Upstate New York gets built next year. Abu Dhabi could also wind up with an in-country plant if such an idea proves "commercially justified," they said.

The joint venture, which has to be approved by the regulators, including the Committee on Foreign Investment in the United States (CFIUS), which gives the White House potential veto power, will be headquartered in the US and run by Doug Grose, currently AMD's senior VP of manufacturing operations. He will be CEO.

Hector Ruiz, the ex-AMD CEO who sheparded the so-called "asset lite" strategy into being, will be chairman and give up the chair at AMD. ATIC and AMD will split the board at the joint venture.

The deal is expected to close by the end of the year. It covers AMD's two fabs in Germany, plus related assets and IP, and 3,000 people. There is a separate 12-month deal between ATIC and Mubadala that will have Mubadala project-managing ATIC's interests in the Foundry.

The Foundry, which has a total enterprise value of $5 billion, will inherit AMD's technology alliance with IBM for silicon-on-insulator (SOI) and bulk silicon through the 22nm generation.

The partners fancy that the deal "alters the global semiconductor business."