Chipmaker Advanced Micro Devices (AMD) has appointed a new chairman to replace former CEO and chairman Hector Ruiz, as it closes the deal to spin off its manufacturing operations. Ruiz was named CEO in April 2002, when founder of the company Jerry Sanders stepped down. He was appointed as chairman of the board in April 2004. (See: AMD reduces stake in The Foundry Co)

AMD yesterday announced that Bruce Claflin has been appointed chairman of its board of directors. Claflin replaces Ruiz, who retired from AMD's board to become the chairman of the board of The Foundry Company, the chip manufacturing concern that was spun off officially yesterday. AMD, a distant runner-up to Intel Corp in the microprocessor business, won approval from shareholders last month for the spin-off.

Claflin has 33 years of experience in senior positions with IBM, Digital Equipment and most recently as chief executive officer and member of the board of directors of 3Com Corp., a provider of voice and data networking products and services, from where he retired in early 2006, about 1.5 years before 3Com went private.

He has run major personal computer businesses and has extensive international experience, including the founding and management of international joint ventures, according to AMD.

The AMD board also appointed Waleed Al Mokarrab to the board. Al Mokarrab is chief operating officer of Mubadala Development Company, the Abu Dhabi-based firm that is a major investor in The Foundry Company. Dirk Meyer remains president and CEO of AMD.

''Bruce Claflin brings a wealth of business experience that applies directly to the challenges and opportunities relevant to our company," said Meyer. "We are also honoured to welcome Waleed Al Mokarrab to the Board. His experience in business development across a broad range of industries will be an invaluable asset to AMD,'' Meyer added.

AMD said ysterday that it has closed the deal to spin off its manufacturing operations to Advanced Technology Investment Company (ATIC), s technology investment company wholly owned by the Emirate of Abu Dhabi that was formed in 2008, and Mubadala.

AMD is billing the foundry as "the world's only US-headquartered semiconductor foundry." Foundry companies, such as Taiwan Semiconductor Manufacturing Co., contract with outside chip design houses to build chips. The AMD spin-off will not only build chips for AMD but also seek business from outside customers.

Upon closing the deal, AMD receives $700 million from ATIC for a portion of its ownership interests in The Foundry Company. The Foundry Company assumes responsibility for the repayment of approximately $1.1 billion of associated AMD debt and Mubadala pays AMD approximately $125 million for 58 million newly issued AMD shares and warrants for 35 million additional shares, AMD said in a statement.

The deal will improve AMD's cash position by approximately $825 million, excluding its consolidation of the operations of The Foundry Company - which has a total "enterprise" value of approximately $4.3 billion. The company is owned 34.2 per cent by AMD and 65.8 per cent by ATIC.

AMD shares rose marginally in after-hours trade after sliding nearly 8 percent to $2.01 on NASDAQ in regular trading as the broader market tumbled.