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AMD signs foundry for 64-bit CPU production

Chartered to punch out AMD64 parts in 2006

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AMD is to outsource AMD64 processor production - or at least a portion of it - the chip maker announced today.

The move is one part of a larger deal struck with Singapore's Chartered Semiconductor Manufacturing which will also see AMD license elements of its process technology to the foundry.

Crucially, Chartered will begin rolling out 64-bit AMD-branded chips in 2006.

AMD was at pains to point out that it will continue to produce such processors itself. Indeed, construction work is well underway on its Fab 36 in Dresden, Germany, which will house the company's first 300mm wafer production facility. It is due to enter volume production in 2006.

"Our plans for AMD Fab 36, which is currently under construction, remain unchanged," said Gary Heerssen, senior VP of AMD's Corporate Manufacturing Group, in a statement. "We intend it to be our benchmark facility for the manufacture of AMD64 products."

However, "Chartered attain a rapid AMD64 product production ramp with high yields and high quality", he added.

Chartered's production timeframe suggests its output is likely to focus on 65nm products, almost certainly multi-core parts. Taking on board AMD's process technology and its products will involve no small investment on the foundry's part, suggesting that AMD sees it as a major production centre. In turn, that indicates the processor maker is anticipating significant growth in demand for its chips - demand that it may not be able to satisfy alone.

The deal also provides AMD with a way of reducing its exposure to the risks and costs associated with the migration to new processor designs and, crucially, new process technologies. It is already partnering with IBM on the development of 65nm and 45nm processes.

Indeed, we expected AMD to announce a similar deal with IBM. Before it announced the new Dresden fab, it emerged that the company had been considering a co-location deal at Big Blue's East Fishkill 300mm fab.

AMD is a long way from becoming a fabless semiconductor company like ATI or Nvidia, but the Chartered deal is certainly the first step on a path the may take it in that direction, particularly as the cost of new plant continues to spiral with each new generation of process technology. ®

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