AMD to spend US$2.5 billion on new German plant

Stan Beer
Monday, 29 May 2006 21:08

Your IT - Home IT

Intel rival chip maker AMD plans to spend US$2.5 billion to exapand an existing chip fabrication plant in order to grow its manufacturing capability in Europe.

AMD, which has now grown its marketshare to about 20% but is still only a quarter of the size of Intel, believes that it needs to spend the money in order to hold on to the gains it has made against intel in the past three years.

The new factory, in Dresden Germany, will effectively double AMD's existing capacity but it will still be a long way behind Intel which claims to have five times the manufacturing capability and far deeper pockets to keep expanding.

Chip fabrication plants are among the most expensive facilities to build because of the requirements for ultra-sterile conditions, fine instrumentation and a high level of automation. Although semiconductor manufacturers, such as Intel and AMD, invest billions each year on plant infrastructure, they get considerable help from governments in places such as Germany, Ireland and Israel because the facilities spawn the development of local technology industries. Intel played a big role in the development of Israel's technology boom.