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Intel starts advanced Oregon plant

The chipmaker begins building a factory that will likely produce the second generation of Merced processors.

Chipmaking giant Intel (INTC) said it has begun building an Oregon plant that will develop a future-generation manufacturing process and then likely produce the much-improved follow-up version of Intel's 64-bit Merced microprocessor.

Intel's second research-and-development plant at its Ronler Acres campus in Hillsboro, Oregon, will refine the 0.13 micron manufacturing process for chips to be produced on 12-inch silicon wafers. Currently, Intel's most advanced chips are manufactured according to the 0.25 micron process on 8-inch wafers.

The Hillsboro plant, or "fab," will probably manufacture the second-generation Merced chip after it converts to a production facility, according to Dataquest analyst Nathan Brookwood.

An Intel spokesman couldn't confirm whether the second generation of Merced will be manufactured at Hillsboro, but said the most advanced Intel processors will be produced there.

The second version of Merced is due in 2001. The plant is set to make the transition sometime around 2002, according to the spokesman.

The initial version of Intel's first 64-bit chip is set to debut in 1999. But because the Merced technology far surpasses current 32-bit Pentium-class chips, there's already room for improvement, Fred Pollack, director of the measurement, architecture, and planning group at Intel, told CNET's NEWS.COM in an earlier interview. Merced's second-generation will be a much more powerful version "that will knock your socks off" and double performance, he said.

The research plant already operating at Hillsboro is working on refining the next-generation 0.18 micron process. When it becomes a production fab around 1999 or 2000, it will manufacture Intel's most advanced Pentium II chips and possibly the first-generation Merced chip, the Intel spokesman said.

A smaller manufacturing process means more transistors can be packed into the same-sized chip. A micron, about 1/100th the width of a human hair, is the unit of measurement for the etched lines on which the transistors are laid.

Larger wafer sizes allow manufacturers to economize by packing more chips onto a single wafer. Some chip manufacturers are already beginning to convert to 12-inch wafers.

The Ronler Acres plant, which will cost $1.5 billion to construct, is part of Intel's $5.3 billion capital spending budget in 1998. Three other fabs are also under construction, in Ireland, Israel, and Fort Worth, Texas.

Intel currently has 11 plants in operation in Israel, Ireland, Arizona, New Mexico, Oregon, and at its home base in Santa Clara, California.

Intel is an investor in CNET: The Computer Network.

Brooke Crothers contributed to this report.