With new factory, AMD ups ante against Intel

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or decrease output of specific chips while in the middle of a production run to better suit what's happening on store shelves.

"APM is allowing them to identify issues with yields much quicker, and once you fix a problem, it stays fixed," Hutcheson said.

Success, however, is not foreordained. Fabs cost billions to erect and fill with equipment. Roughly $2.5 billion will get invested in outfitting Fab 36 through 2007, according to the company. An industry downturn or product delays can turn large factories into liabilities.

Intel will also likely continue to erect fabs. Another risk: Chartered. Turning a profit on PC processors through foundry arrangements has not been easy to date.

To ameliorate some of the financial risks, AMD will not completely build out the facility just yet. As it stands now, AMD can start production on 13,000 silicon wafers a month. Enough empty space, however, exists to crank that up to 20,000 wafer starts a month. Getting to the 100 million mark will involve populating the current empty space in the 13,400-square-meter plant with equipment.

The wafers from Fab 36 will have a diameter of 300 millimeters. AMD currently produces chips on 200-millimeter wafers. A wider wafer means more chips without a huge increase in costs. Intel, IBM and others have already graduated to 300-millimeter production.

The facility will produce chips made on the 65-nanometer process, which will hit store shelves next year. Later, AMD will churn 45-nanometer and 32-nanometer chips out of the facility.

Ostrander said AMD has not fully formalized plans on what to do with Fab 30 next door. It may retrofit it for 300-millimeter manufacturing, or it may use it for another purpose.

The 30 percent mark has been a white whale for the company for years. Founder Jerry Sanders often set it as a goal and always fell short. AMD currently has about 17 percent of the market, though at one point a few years ago, it commanded a little more than 21 percent.

One of the changes current CEO Hector Ruiz brought to AMD was not to mention the figure early in his tenure. The number, however, has been cropping up more recently in speeches from AMD executives.

Why did AMD build in Germany, a country known for tight labor laws and high-price employees? Tax breaks and subsidies. The vast majority of the costs go into semiconductor manufacturing equipment, which roughly costs the same all over the world. Labor costs are a minor factor in the multibillion-dollar budget.

Thus, the most significant variable is the amount local governments are willing to pay to bring in a what will become a major economic engine for them. By 2007, AMD and the local government estimate that the two fabs will have created 7,500 new jobs, directly and indirectly, in the former East Germany city.

Government loans and subsidies come to about $1.5 billion, according to AMD.

AMD Fab36 is empty - what about Intel's fabs?

This article talks about AMDs new fab as if it were operational, but the pictures show an empty fab.
<a class="jive-link-external" href="http://news.com.com/Photos+Inside+AMDs+German+fab/2300-1006_3-5895008.html?tag=carsl" target="_newWindow">http://news.com.com/Photos+Inside+AMDs+German+fab/2300-1006_3-5895008.html?tag=carsl</a>

Intel has five 300mm fabs in full operation and fully automated. Why don't you have an article on their fabs?

[xero.03]

No need

Why? Intel is expected to open and expand current and future Fabs, they are a powerhouse at 30 Billion USD/year. Following all there news would seem inane and repetitive in my eyes, either way AMD is the underdog in this competition by a ong shot and it would seem that AMD-biased as well as Intel-biased (as well as unbiased of course) tech industry followers would much rather hear about AMD's progress for multiple reasons. It might also be due to the fact that last I checked (which was about 6 months ago) both AMD's Fab30 and Fab36 are supposed to be the most advanced Semiconductor fabs in the world with their modular construction and the such but maybe that's no longer true, I haven't really been following lately. (and no I'm not AMD-biased, I'm largely unbiased I just prefer AMD chips at this current junction in time)