AMD starts shipping chips from plant

Chips based on the more advanced 65-nanometer process also will be sent out--but not for another few months.

Advanced Micro Devices has started to ship processors out of its new plant--but the advanced chips for which the building was erected won't start coming out for another few months.

The company has begun to produce processors built on the 90-nanometer process at its Fab 36 facility, AMD announced Tuesday at a press conference in Dresden, Germany.

Test chips based on the more advanced 65-nanometer process are also coming out of Fab 36, but the company reiterated that it won't start shipping these types of chips in production volumes until .

By 2008, AMD hopes to have the factory capacity in place that will allow it to produce 30 percent of the processors for the PC market.

The 65-nanometer question is one of the big issues facing the chip world in 2006. Chips made on the process are smaller, faster and ultimately less expensive to manufacturer than their 90-nanometer counterparts. Although many factors come into play, a company that moves rapidly to a new manufacturing process can gain market share over competitors that don't. (The 65 and 90 nanometer measurements refer to the average feature size on these chips.)

Intel began and will have four factories producing these chips by the end of the year.

Paul Otellini, Intel's CEO, asserted last month that the manufacturing lead, combined with new chip designs, will help the company regain market share.

For its part, AMD disputes this and notes that its manufacturing prowess is far better than it was in years past. Still, AMD trails Intel by several months. AMD won't be substantially converted to 65-nanometer production until the middle of 2007.

An AMD representative also reiterated that the Sunnyvale, Calif.-based company has partnered with Chartered Semiconductor Manufacturing, a chip foundry in Singapore, to start producing 90-nanometer processors in the second half of this year. In the past, AMD has had the right to make chips in factories belonging to other companies, but hasn't done so.

Getting enough capacity to hit the 30 percent market share spot will take some work. Currently, AMD is putting equipment into 13,400 square meters of space in Fab 36. To get to 30 percent, AMD will have to fill up all 20,000 square meters of the building. It will also have to continue to exploit the facilities at Chartered.

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