AMD narrows fab site to Dresden

Electronic News, August 29, 1994

SUNNYVALE, CALIF. -- Advanced Micro Devices confirmed reports it has narrowed down a search for a European fab to Dresden, Germany, where Siemens also is building a new factory. A company spokesman said German government and company officials have engaged in "preliminary but substantive" discussions.

"AMD is actively investigating potential sites to build our next megafab facility," the spokesman said. "We're looking to build a very leading edge plant." The fab, he said, would process wafers at the sub-0.5-micron design rule and would be geared to manufacture the upcoming K5 super scalar RISC microprocessor and other generations of AMD's K86 family.

If AMD's board of directors approves Dresden as the new manufacturing site, the German federal and Saxon state governments would contribute about 30 percent of the total investment costs, or about 600 million marks (US$392 million), said Armin Reck of the Economics Ministry of the State of Saxony. AMD is expected to invest about 2 billion marks ($1.3 billion) in the new facility and to create about 1,400 jobs, Mr. Reck said.

The AMD spokesman would not discusss details. "There are some reports in Europe that are overly enthusiastic," said the AMD spokesman. "But there is no agreement at this stage, and there's been no decision. It's impossible to tell when something might be announced."

Saxony, however, fully expects that AMD's board will sanction the selection of Dresden in its next meeting in mid-September or in a special meeting soon thereafter, Mr. Reck said. "Everything depends on whether we are still negotiating when AMD's board meets on Sept. 14. Negotiations have been going on for months now. They already looked at potential sites here. It looks good."

The volume of government subsidies, the abundance of qualified high-tech personnel, the presence of several high-tech companies and Siemens' future facility were some of the criteria that influenced AMD's choice, according to Mr. Reck.

Finding a site in Europe would give AMD a strategic location, since it does not own any fabs in that region. AMD is currently building two more fabs on different continents. A $1 billion manufacturing facility in Austin, Tex. should be ready to go on-line by mid-1995. Much like the envisioned Dresden site, it will produce $2 billion worth of sub-micron MPUs, including K5s and 486s, each year.

Another fab dedicated to flash memory is scheduled to be ready Sept. 16 in Aizu-Wakamatsu, Japan. The $800 million project is being jointly built with Fujitsu, which is paying for half the construction costs.