The new plant would be Intel’s first to make advanced 45-nanometer microprocessors on silicon wafers measuring 300 millimeters in diameter. Production is slated for the second half of 2007.
Currently, the company ships 90-nm chips on 300mm wafers and its next-generation 65-nm products are on track for production later this year, said Bob Baker, senior VP of Intel’s technology and manufacturing group, on a conference call.
Intel’s new wafer facility, called Fab 32, joins two existing Intel fabs at the Chandler, Arizona site. In addition to 45-nm chip production, Fab 32 would be designed to migrate to future technologies, a common Intel practice.
Since Intel typically builds three wafer fabs per technology generation, Intel likely would bring 2 additional 45-nm fabs on board at some future point. The last fabs Intel built were in Ireland in 2002, which went online a little more than a year ago, and in the US in New Mexico, which began operations in 2003.
But the announcement of Fab 32 in Arizona did little to quell rumors about where Intel would expand its manufacturing capacity.
For instance, on Sunday, Israel prime minister Ariel Sharon reportedly told his cabinet that Intel had agreed to build a $4bn chip-making plant in Southern Israel. Sharon said Intel chairman Craig Barrett agreed to the deal during a phone call after the Israeli government agreed to up its grant to 15% of project’s cost or as much as $525m.
The plant would be located in Israel’s Kiryat Gat, where Intel already has an assembly plant, and would employ 2,000 workers, according to a statement from the prime minister’s office. Apparently, the Israeli Finance Ministry and the Ministry of Industry and Trade were not aware of any such decision.
Intel declined to discuss Sharon’s comments, which Baker called speculation.
We aren’t making announcement on Israel today, said Baker on a conference call. We’re certainly making a key announcement here in Arizona today. When pressed on Sharon’s comment, Baker later said, We haven’t made a decision about the next factory location.
Baker also pointed to previous speculations from government officials around the world about Intel manufacturing that have not materialized, specifically a rumor in mid-June that Intel was planning a chip-assembly facility in India.
An Intel fab in Israel would be the company’s first in Asia. To date, it has just lower-cost assembly facilities in developing countries. Outside the US, Intel fabricates wafers only in Ireland, thanks to generous incentives of the Irish government.
Manufacturing in different locations in Asia represents unique problems, Baker said. The ability of Intel to protect its intellectual property and enforce that protection is likely a major consideration for the company, as well as a steady supply of basic utilities, such as electricity.
He also pointed to benefits of having a US-based fab, such as the accumulated knowledge of being able to operate these multi-million dollar pieces of machines by current Intel employees.
Baker said the decision to build Fab 32 in Arizona was not an easy one. The lure of Arizona was, in part, changes to the state’s tax law enacted in May, he said. The new law gives companies that make a billion dollar or greater capital investment in the state a choice on a metric to pay sales tax. For instance, a company may choose to pay tax on total investment, factory output or number of employees. It helped create a stable environment for Intel’s $3bn investment, Baker said. We looked a number of sites.
Fab 32, when completed, would become the company’s sixth 300-mm wafer fab. Wafers that measure 300 mm in diameter essentially double the capacity of older, 200 mm wafer technology. Bigger wafers lower the production cost per chip and use 40% less energy and water per chip than a 200-mm wafer factory. Intel currently is in the process of converting a number of 200-mm fabs into 300-mm facilities.
In addition to Ireland, Intel has 300-mm fabs in Oregon and New Mexico.
The 1-million-sqare-foot fab would include 184,000 square feet of clean room space. The fab would employ as many as 1,000 high-skilled, high-paid manufacturing workers. About 3,000 trades people would also be hired to build the factory.
The revamped facility in New Mexico would boost Intel’s test capacity for the next two years and would employ about 300 workers during that time.
Intel’s 45-nm technology currently is being developed at its D1D research facility in Oregon. The company declined to talk specifics about the challenging technology, such as whether 45-nm chips would incorporate new types of materials.
