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AMD prepares for a major ramp up this year leading all the way through to 2008

AMD's position as a force to be reckoned is no longer under question. The company has invested significantly over the last several years and made very good bets on its strategy that are now bringing fruits to the effort that was put in.

We previously reported earlier in the year that AMD was putting in a rough sum of $500M USD to upgrade Fab 36 in Germany. The money was laid out to upgrade the facility to produce larger wafers with smaller lithography processes. Since then, Fab 36 has been operating at a good pace and is now producing a good amount of revenue.

Despite the initial investment, competition often sparks innovation, and innovation doesn't stand still. According to German reports (english), AMD is in the process of rounding up another $5.8B USD which is to be spent gradually up to 2008. The company is using the money to further invest into its Dresden location. If this plan goes through successfully, AMD would have made one of its largest ever expansions in its history -- or for that matter, any semiconductor company.

The money is initially slated for Fab 36 and Fab 30 in Dresden, but the German report indicates much of the earmarked money will also go towards a third AMD foundry in the Dresden area, with work beginning this summer.  Some of the funds will also be used for employee salaries at the new and upgraded facilities.

The year so far has been exciting, with many announcements from both sides of the camp. Thanks to first impressions of Intel's upcoming Conroe processor, many analysts are now looking at AMD with a great deal of anticipation to see what the company will come out with next, specifically the K8L architecture. AMD is currently on track in terms of timely product releases and expects to deliver quad-core desktop solutions in early 2007. The company recently broke its own 3GHz barrier with its Opteron family.

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Third fab in Dresden?
By Scrogneugneu on 4/5/2006 8:07:45 PM , Rating: 1
So, what exactly happens if, someday, a natural disaster hits Dresden and destroys pretty much eveything in its path?

I'm all for new fabs and investments, but investing so much in the same place is not advisable...

RE: Third fab in Dresden?
By fw on 4/5/2006 8:35:10 PM , Rating: 3
What kind of natural disasters?? Hurricanes and tsunamis aren't issues due to location, you might get a single tornado every 3 years in all of Europe, and Germany rarely if ever has earthquakes. The only thing you might have is floods due to the river flowing thru Dresden, but that can easily be mitigated by the right building site.

Location is not an issue

RE: Third fab in Dresden?
By modestninja on 4/5/2006 10:53:43 PM , Rating: 2
What if they get firebombed again?

RE: Third fab in Dresden?
By Madellga on 4/6/06, Rating: -1
RE: Third fab in Dresden?
By josmala on 4/6/2006 2:47:03 AM , Rating: 3
If disaster is caused by human nature, its not called natural disaster.

RE: Third fab in Dresden?
By Griswold on 4/6/2006 5:25:06 AM , Rating: 3
Flooding is no real issue there either, as the Fabs are pretty far from the river, just like the airport - for a good reason.

I'm sure they carefully picked the location with floods in mind. They happen pretty much on an anual basis there.

RE: Third fab in Dresden?
By PrinceGaz on 4/6/2006 5:19:52 AM , Rating: 2
I was a bit concerned they were putting all their eggs in one basket (or all their fabs in one city) as well, as some industrial disaster/terrorism/whatever could destroy them all in one go.

But the facilities will be well covered by insurance so the main effect of catastrophic damage would be reduced production capacity until they can be rebuilt. And the insurance might even cover losses caused by the facility being unusable during rebuilding.

I'm not suggesting a company anywhere near the size of AMD would do it, but it's certainly not unknown for small less reputable businesses to destroy premises because of how much they'll get from the insurance claim.

"Well, we didn't have anyone in line that got shot waiting for our system." -- Nintendo of America Vice President Perrin Kaplan
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