Thu, Jan 11, 2001 - Page 1 News List

AMD may build new plant with TSMC

BLOOMBERG , TAIPEI

Advanced Micro Devices Inc, Intel Corp's main rival in computer processors and flash memory chips, may ally with a Taiwan company to help build a chip factory that could cost as much as US$4 billion, local media reported yesterday.

The report, which did not cite sources, said AMD may join either Taiwan Semiconductor Manufacturing Co (台積電) or United Microelectronics Corp (聯電) to build the plant. AMD would also consider investing directly in TSMC or UMC, the report said.

AMD announced Tuesday that it is looking for joint venture partners in the company's third 12-inch silicon wafer plant, expected to start operating in 2004.

Taiwan Semiconductor spokesman Tzeng Jing-hao (曾晉皓) declined to comment on whether his company is in talks about the project.

TSMC, the world's largest made-to-order semiconductor company, is one of a few chipmakers to start producing 12-inch wafers.

UMC spokesman Alex Hinnawi said he was unaware of any negotiations with AMD. UMC last month announced a joint venture with Infineon Technologies AG, Germany's largest chipmaker, for a 12-inch wafer plant to be built in Singapore for US$3.6 billion.

AMD President Hector Ruiz said Tuesday the company is looking for partners to build a 12-inch silicon wafer factory for US$4 billion. TSMC and UMC are among the first companies in the world to start production of 12-inch silicon wafers.

AMD snapped up more sales last year as No. 1 chipmaker Intel stumbled with chip shortages and technical glitches. AMD's flagship Athlon processors were the fastest chips available for much of the past year.

After its success in the consumer market, AMD plans to introduce chips for notebook and server computers that run Web sites. That means AMD will need more capacity, company spokesman John Greenagel said.

The processor plant, dubbed Fab 35, would be AMD's third.

The Sunnyvale, California-based chipmaker has one in Austin, Texas, and another in Dresden, Germany. AMD also has a joint venture with Fujitsu Ltd to make flash memory chips and said in July that the venture could begin adding a 12-inch wafer plant in 2002.

Chipmakers need to find partners to share the multi-billion dollar cost of building a 12-inch silicon wafer factory, said Janardan Menon, an analyst with Dresdner Kleinwort Wasserstein.

"AMD would be a better partner than Infineon [which joined in a plant project with UMC]," said Menon.

While TSMC and UMC both count processor makers Intel and AMD as customers, the Taiwan companies are only making chipsets for the two US companies, he said. Chipsets, which link a processor with other parts of a computer, don't require the most advanced manufacturing technology to produce.

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