“Positive customer response and increasing momentum for our AMD 64 processors make it clear that the time is right to expand our manufacturing capacity to meet future demand,” says Hector Ruiz, president and CEO of AMD.

When it goes live next year, the new production facility, known as Fab 36, will supplement AMD’s existing micro-chip fabrication plant in Dresden, Fab 30. It will eventually produce about 13,000 units each month, employing more than 1000 workers, most of them highly skilled. A further 1300 high-tech jobs with local suppliers are likely to be created.

Advertisement

As fDi went to print, high-tech facility engineering company M+W Zander was scheduled to transfer the shell building to AMD ready for fitting with specialist equipment. The first chips are expected to be produced in May or June 2005 before the facility is completed in October. High-volume production is scheduled to begin in 2006.

In total, AMD has committed $2.5bn for the facility until 2007. The project is to receive federal and state backing worth an estimated $660m in investment allowances, grants and guarantees, but AMD maintains that the financial package alone was not enough to justify its decision to build a second plant in Dresden. “We considered several other sites, for example in Asia and the US, which offered similar incentives. But in the end it was not a purely financial decision,” says company spokeswoman Cornelia Sonntag.

AMD chose Dresden partly because of its industrial heritage as a semi-conductor centre in the former eastern bloc counties. “AMD has had good experiences in Dresden since 1997 and it has been easy to find people trained in semi-conductors,” says Ms Sonntag. The company has been particularly pleased with the level of co-operation it has received from local universities and state-owned research institutes, she says.