AMD ponders next fab site

Market share goals force capacity boost

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AMD is deciding where to build its next fab, with an expansion of the chip maker's Dresden facility seen as the most likely candidate.

Company CEO Hector Ruiz said last week at AMD's analyst conference that further fab capacity was going to be needed soon, a point he re-iterated this week in an interview with German newspaper the Frankfurter Allgemeine Zeitung.

"It is very likely that by the beginning of 2008 we will need a new fab," he said.

According to the paper, AMD has already begun discussing the matter with local authorities in Dresden and the Saxony state government, both of whom have helped the company on past fab projects with a variety of grants.

AMD is currently constructing its Fab 36 in Dresden, its first 300mm wafer production plant. It is already producing chips on a trial basis, with full production anticipated early next year.

Interestingly, insufficient production capacity is one of the reasons cited by sources close to Apple for the Mac maker's decision to look to Intel for x86 processors rather than AMD.

AMD is aware of the capacity issue and last year began making overtures to foundries in a bid to find production partners. Such is the increasing cost of new plant that the foundry route may prove a more cost-effective future for AMD's chip production. In November 2004, AMD signed Singapore's Chartered Semiconductor to punch out AMD64 processors from 2006 onwards, possibly focusing on 65nm parts.

The company's partnership with IBM in the development of 65nm and 45nm fabrication processes could see AMD making use of Big Blue's foundries.

AMD has been claimed to have set itself the goal of a 25 per cent share of the x86 market, for which it believes it will need to grow its output capacity, from its own production lines and from others', significantly. ®

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