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Intel to retool New Mexico plant for 45-nanometer chips

Chipmaker says it will spend as much as $1.5 billion to retool the factory, which will start to make chips with cutting-edge 45-nanometer-wide transistors

Intel said on Monday it will spend $1 billion to $1.5 billion to retool a factory in New Mexico, which will start to make chips with cutting-edge 45-nanometer-wide transistors in the second half of 2008.

A spokesman for the world's largest chipmaker said Intel's 2007 capital expenditure forecast of $5.3 billion to $5.7 billion included the portion of renovation costs to be spent this year. The company has not forecast capital spending for 2008.

Intel also said in a statement that it is on track to start 45-nanometer production at another facility in the second half of this year.

The factory to be renovated in Rio Rancho is known as Fab 11X and will be the fourth Intel plant to use 45-nanometer technology, which includes new materials that boost chip efficiency by cutting leakage of electrical current.

Smaller transistors are key to increasing chip power and efficiency. About 400 45-nanometer transistors could fit on a single human red blood cell.

The New Mexico facility currently makes 90-nanometer chips.