Intel plans new 300mm manufacturing plant for Arizona

Intel plans to build a new chip manufacturing plant in Arizona.

Intel will build its next 300-millimeter wafer manufacturing plant in Chandler, Arizona, alongside existing Intel facilities, the company said Monday.

Scheduled for completion in the second half of 2007 at a cost of US$3 billion, Fab 32 will become Intel's latest wafer fabrication plant (commonly known as a fab) to use silicon wafers measuring 300mm in diameter. Chip manufacturers cut their products from circular silicon wafers, and the industry is in the midst of a transition to 300mm wafers, which allows manufacturers to yield more chips from the production of a single wafer.

Fab 32 will also be Intel's first volume manufacturing fab to use 45-nanometer processing technology, which is two generations beyond the current 90 nanometer technology used to build Intel's most advanced chips. The company is currently readying its first 65-nanometer processors, scheduled to ship later this year. The size of the processing technology refers to the average size of the chip's features.

Advanced Micro Devices plans to open its first 300mm fab next year in Dresden, Germany. IBM already operates a 300mm fab in East Fishkill, New York. Foundries Taiwan Semiconductor Manufacturing and United Microelectronics each have two 300mm fabs.

Intel's roots may lie in California's Silicon Valley, but all of Intel's recent manufacturing investments have been built outside the state. Intel currently operates two 300mm fabs in Oregon, and one each in New Mexico and Ireland. A fifth plant is nearing completion in Chandler and Intel is adding capacity to its existing 300mm fab in Ireland. While its advanced manufacturing facilities are located in the U.S., Ireland and Israel, Intel operates several test and assembly plants around the world in places such as Malaysia, Costa Rica and China.

Many hardware companies are moving manufacturing plants outside the U.S., citing the lower cost of operations in emerging markets such as China and Malaysia. However, with the complexity of modern chip manufacturing technology, Intel believes that having most of its manufacturing facilities located in the U.S. allows its workers to collaborate more easily than if some manufacturing plants were located in far-flung parts of the world, said Bob Baker, senior vice president of Intel's Technology and Manufacturing Group, on a conference call.

Intel also received some tax breaks from the Arizona government in return for making the decision to expand its operations there, Baker said. The new plant will create around 1,000 jobs in Arizona over the next several years, with up to 3,000 workers needed to help build the plant, he said.

Intel also plans to convert an older fab to a testing facility at the Arizona facility. Earlier this year, India's minister for IT and communications announced Intel had decided to build a new testing and assembly plant there, but an Intel spokeswoman denied that a final decision had been made at that time.

In a related matter, Israel Prime Minister Ariel Sharon announced Monday that Intel had decided to build a new plant in Qiryat Gat, Israel, where the company already maintains a manufacturing facility. But Baker declined to comment on that report, saying that no final decision had been made.

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