The Wall Street Journal has confirmed that Advanced Micro Systems is announcing a plan to cut costs by spinning off its manufacturing operations to a new joint venture.

The new venture, which includes funding provided by investment entites associated with the government of Abu Dhabi, will make chips for AMD and also other companies. Major AMD factories in Germany will be taken over and some of the company’s debts will be assumed by these new investment entities.

The venture is expected to control about $5 billion worth of AMD’s assets as AMD continues to struggle with heavy losses and major debt, a result from its drawn out battle with Intel Corp and the $5.4 billion acquisition of ATI Technologies.

AMD had previously expressed its intent to completely restructure the company, drawing much rumor about potential breakup over the course of the last several months.

This new production process will be similar to outsourcing, in which other companies known as foundries will be operating AMD’s chip manufacturing services.

IBM, a long time partner of AMD, has expressed that they will continue to cooperate with the chip company and will support its decision for the new venture.