Soitec, which claims to be the world's leading supplier of SOI substrates, said the purchase order was the largest in the company's history, in both the number of wafers and dollar amount. The company did not release specific figures on the value of the order or the number of SOI wafers being purchased by AMD.

Earlier this year, AMD executives disclosed aggressive plans to use SOI wafers in production of next-generation microprocessors. Circuits produces with silicon-on-insulator wafers can operate at higher speeds while using less electrical power, compared to ICs fabricated on standard bulk silicon substrates. Therefore, SOI materials have become a prime candidate for central processing units in both high-end computer workstations as well as portable PCs, but higher costs remain a concern for most commercial applications.

During a conference call with financial analysts this summer, AMD chairman W.J. (Jerry) Sanders III said his company was pushing ahead with plans to ramp volume production of microprocessors using 0.13-micron technology and SOI substrates. Pilot production of SOI devices has begun in Dresden, Germany. Eventually, Sanders said, AMD would convert all of its PC processor production to silicon-on-insulator wafers (see July 13 story).

The "Hammer" series of microprocessors is expected to enter pilot production in the second half of 2002, with initial samples being made available to some customers by the end of the year. AMD officials have told SBN that volume production of 0.13-micron SOI-based processors will begin in early 2003. The Hammer processors will incorporate CMOS-based, partially depleted SOI circuits.

"We will require high-quality SOI material for volume production of our new product family, and Soitec has demonstrated its ability not only to meet, but to exceed, our demands in this respect," said William Siegle, senior vice president for technology and manufacturing operations and chief scientist at AMD. He said Soitec has assured AMD that it will be able to produce sufficient quantities of its Unibond SOI wafers, which are made with the company's Smart Cut technology.

In Bernin, Soitec is constructing a second SOI wafer factory, which is expected to give the nine-year-old company additional capacity to produce up to 1.2 million eight-inch (200-mm) substrates per year. The new plant and expansions to Soitec's existing facility will bring the company's total capacity to about 2 million eight-inch equivalent SOI wafers per year by 2004 (see July 6 story).

"Today we have 80% of the SOI market, and more than 80% of our sales are going to the United States," said André Auberton-Hervé, president of Soitec. "We do have other big customers, and we made the decision to invest in a large production facility, called Bernin 2," he told SBN in a phone interview today. The new facility will be capable of producing both 200-mm and 300-mm SOI wafers using Soitec's Smart Cut technology.

Last month, Soitec reported its sales increased 174% to 20.8 million euros ($18.1 million) in the company's second fiscal quarter, ended Sept. 30, compared to revenues in the same period last year. For the first six months of its fiscal 2002 year, Soitec's sales were up 149% to 37.9 million euros ($33.7 million) compared to 15.2 million euros ($13.5 million) in the same period last year. The publicly traded company said it now expects revenues in the current fiscal year, ending March 31, to double last year's sales of 43.3 million euros ($38.5 million).

-J. Robert Lineback reporting from Dallas