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Business

US Chipmaker to Invest $2.5 Billion in Dresden Factory

Advanced Micro Devices, the US computer chip maker, has announced plans to invest $2.5 billion (1.96 billion euros) in expanding capacity at its factory in the eastern German city of Dresden over the next three years.

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A engineer with a dummy of a 300-mm wafer near the AMD clean room in Dresden

Advanced Micro Devices (AMD), based in Sunnyvale, California, said it was planning a new semiconductor plant to be called AMD Fab 38 at its Dresden site. And it also planned to switch production at its existing AMD Fab 30 plant from 200-milimeter wafers to 300-milimeter wafers.

Boosting investment in the region

AMD has been in Dresden in the eastern state of Saxony since 1996 and employs about 2,800 people at two factories in the region. The new projects will bring total investment in the region to more than eight billion dollars. The investments highlight Dresden's status as one of the few relatively prosperous regions of eastern Germany.

AMD said it would expand 300-mm capacity at the existing AMD Fab 36 plant and install a new clean room area to handle the site's growing "Bump and Test" requirements -- one of the final stages of the manufacturing process where wafers are prepared to be shipped for packaging.

AMD plans to ramp down 200-mm manufacturing in the second half of 2007, with preparation already underway to ramp up 300-mm wafers on 65-nanometer process technology by the end of 2007.

"As global demand continues to rise for AMD products, we are scaling our manufacturing capacity to meet our customers' growing needs," said AMD chairman and chief executive, Hector Ruiz.

Blick auf den Erweiterungsbau von AMD, Advanced Micro Devices, in Dresden am Freitag, 14. Mai 2004

AMD already enlarged the Dresden site in 2004

"To achieve this, we are pursuing an aggressive path to invest in and expand our top-rated manufacturing capabilities in Dresden. These strategic investments highlight how significant Germany and Europe are to the future of AMD competitiveness," Ruiz said.

Overall declining investment

The $2.5 billion investment will create about 420 jobs, but Hans Deppe, general manager of AMD's Dresden plant, said most of the money would go to machinery needed to produce the 300-mm wafers. AMD's decision to expand in Germany runs counter to an overall trend of falling levels of investment in Europe's largest economy.

In 2004, foreign investment in Germany fell by 31 billion euros ($39 billion), the first drop since 1992, according to the United Nations Conference on Trade and Development, which tracks investment flows.

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