Intel says buy 65 nano, buy American

Intel has started to produce chips made on the 65-nanometer process in a fabrication facility in Arizona, making it the second factory it has cranking out these chips.

The company said in October that it started shipping Presler, a dual-core processor made on the 65-nanometer process, to PC makers out of its D1D fab in Oregon. Adding an Arizona facility will greatly increase the volumes of these and other new chips.

Intel will also start producing 65-nanometer chips out of fabs in Ireland and New Mexico in 2006. By the third quarter, more chips will be being made on this process than the current 90-nanometer process.

Although chip designs and novel transistor concepts often gain headlines, semiconductor producers live and die by manufacturing, and much of Intel's success can be attributed to relentless advances in production.

Chips made on the 65-nanometer process sport features that measure, on average, 65 nanometers. A nanometer, derived from the ancient Greek word "nano" or midget, is a billionth of a meter. A human hair measures about 90,000 nanometers in diameter.

Current chips sport 90-nanometer features. Shrinking those features decreases costs because more chips can be punched out of a single wafer, and also improves performance.

Bob Baker, senior vice president and general manager of the technology and manufacturing group at Intel, also points out that many of Intel's recent investments in fabs have been in the U.S. The company has committed to investing $4 billion in the U.S. in fab expansions, which will result in about 2,000 jobs. Although labor costs are higher here, there are more technicians skilled in chipmaking here as well.

"Their experience and ability to troubleshoot and get capital equipment back into production can make or break" a company's cost goals.