Intel to build $2 billion plant for copper chips

As part of its ongoing quest to expand its factory capacity, Intel today said it will spend $2 billion to build a fabrication plant in New Mexico dedicated to manufacturing chips containing copper wires.

The new plant, which will be located at Intel's Rio Rancho, N.M., manufacturing park, will produce cutting-edge Itanium and Pentium microprocessors when it goes online in early 2002, said Mike Splinter, general manger of the technology and manufacturing group at Intel.

The plant comes as part of aggressive construction plans kicked off this year to ensure the company will have the factory capacity to meet the growing demand for silicon. The company earlier this year said it was breaking ground on a microprocessor fabrication plant in Arizona and also bought facilities from Rockwell and others. The company recently increased its capital expenditures for the coming year from $5 billion to $6 billion.

The New Mexico plant will employ 500 to 1,000 people and cover roughly 1 million square feet.

Chips that come out of this factory will differ from current Intel processors in three significant ways. First, the chips will be made on 300 mm diameter wafers. Current wafers measure 200 mm in diameter. The greater size means that each wafer will contain more than twice as much surface area.

"We should gain a 30 percent cost improvement," by shifting to 300 mm wafers, Splinter said.

Second, the chips will contain circuits made of copper, rather than aluminum. Copper conducts electricity better than aluminum. As a result, copper chips produce less heat and can be run at faster speeds. Advanced Micro Devices is moving to copper this June with its Thunderbird chip.

Chip competition

Finally, the chips from this factory will contain features measuring 0.13 microns wide, smaller than the 0.18 microns of the latest Pentium IIIs.

Combined, these advancements will mean that Intel can pack four times more transistors onto each wafer as it can now. Performance will grow, while the company's costs and volumes will go down.

Although Intel is plagued with chip shortages because of limited factory capacity, the new plants announced this year won't help ease that crisis. Chips won't start coming out of the Arizona facility until late next year, while the New Mexico plant won't pop out processors until 2002.