Last week was a big one for Advanced Micro Devices Inc.
At Comdex early in the week, Sun Microsystems Inc. announced it has adopted AMD's 64-bit Opteron for new single- and dual-processor servers. According to analyst Nathan Brookwood of Insight64, Saratoga, Calif., Sun executives hinted that the company might use Opteron for Sun workstations, of which roughly a million units are sold each year.
The combination of Sun's software, including its Solaris Unix-based operating system, and AMD's 64-bit processor technology is "a marriage made in heaven," Brookwood said. Sun needs to attract new users that seek an X86-based solution, while AMD needs partners such as Sun "to get its 64-bit technology, which is really neat stuff, out to users," he said.
AMD, which is based in Sunnyvale, Calif., also needs to build volumes if it hopes to fill up its 300mm Fab 36, announced last Thursday after heavy subsidies and loan guarantees from both the German federal government and the Free State of Saxony had carried the day for a location in Dresden for the $2.4 billion plant.
AMD broke ground on Fab 36 last week, and expects to finish the building in a year and begin microprocessor production early in 2006, using 65-nanometer design rules on 300mm wafers.
Kevin Krewell, an analyst at In-Stat/MDR in San Jose, said AMD's search for a partner to share the capacity from Fab 36 might lead it to either Sun or Nvidia Corp., the graphics chip vendor.
For several years, AMD has said it would need a partner to share capacity of any 300mm fab. The company announced Fab 36 without such a partner in place, a move dictated more by performance needs than capacity.
Brookwood said AMD needs to be in production with a 65nm process early in 2006 in order to compete on a performance basis with Intel Corp. for the high end of the MPU business.
IBM likely partner
AMD chief executive Hector Ruiz said that Fab 36 and IBM Corp.'s Fishkill, N.Y., fab would, for the most part, use the same production equipment, stemming from their joint process development agreement for 65- and 45nm process technology.
"IBM is one of our many options. We have several potential partners, but because IBM and Advanced Micro Devices will have the same technology it's a natural thing to think we would partner with them," Ruiz said.
Ruiz also acknowledged that AMD's schedule for 90nm production will slip by two or three months, with 90nm production beginning in the third quarter of 2004 at Dresden.
AMD had considered New York for its next fab, he said. The deciding factor was that the company has invested in training the existing workforce, and wants to build on the expertise of the 2,000 employees in Dresden.
"The overwhelming positive of the people in Dresden was hard to overcome," Ruiz said.