AMD is to spend $2.5bn upgrading its Dresden, Germany chip plant, primarily to replace its ageing 200mm-wafer fab with a higher-yield 300mm-wafer facility. The result: a fourfold increase in processor production in just under three years.

In part, that gain will come from increased production at Fab 36, AMD's current 300mm-wafer plant, which began punching out chips in October 2005. The company wants to raise output there by 25 per cent.

Fab 30, AMD's 200mm-wafer fab, is due to cease production in the second half of 2007. By the time it does, Fab 38, the new 300mm-wafer plant, will be ready to commence production. As Fab 30 winds down, parts will be incorporated into Fab 38.

Fab 38 will initially produce 65nm chips before moving to a 45nm process mid-2008. Together, Fab 36 and Fab 38 will manufacture 45,000 wafers a month. That, AMD hopes, will ensure it doesn't run into the manufacturing capacity limits that have hindered the company's growth in the past. That's something it's desperate to avoid, particularly now it's winning so much server market share from arch-rival Intel. ®