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Advanced Micro plans plant in Dresden

Number two computer chipmaker Advanced Micro Devices said Thursday it would spend 2.4 billion dollars in the next four years to build a state-of-the-art manufacturing plant in Dresden, Germany.

AMD's expansion plans come at a critical time for the computer microchip manufacturer. AMD has a new line of promising processors with which to battle Intel, its much larger competitor.

However, AMD's market share remains relatively low at around 20 percent.

The Silicon Valley firm said it has arranged US$1.5 billion in external financing and government support for the new factory, which will make chips from 300mm silicon wafers, the largest currently available.

AMD said it would get US$700 million in loans from a group of banks, including an 80 percent residual guarantee from Germany and Saxony, and another 500 million in anticipated grants and allowances from the German and Saxony governments.

The new plant, called Fab 36, will be built next to AMD's Fab 30 and should be ready to produce chips in 2006. AMD expects the facility to employee about 1,000 people.

"By building in Dresden, we are able to leverage the outstanding capabilities of our existing AMD Fab 30 and gain access to the most substantial government-backed financial incentives package available to us," said Bob Rivet, chief financial officer at AMD.
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