AMD's expansion plans are based on the presumption that the trend in the semiconductor industry towards fab-lite and fabless business models will generate additional demand for foundry services, Nothelfer said. In addition, the future foundry company will manufacture microprocessors for AMD as well as graphics chips for AMD's ATI subsidiary. In order to manufacture the graphics chips, the company plans to add 32-nm bulk production technology in addition to its existing 45-nm SOI and future 32-nm SOI processes.

Fab36 in Dresden is currently ramping up 45nm volume production. Commercial 45nm production will start during the current quarter, Nothelfer explained. Fab38, co-located with Fab36, is currently being expanded, production ramp-up is scheduled for 2009. Fab38 is designed to manufacture devices with geometries as small as 22nm. Each fab will have a capacity of 25.000 waferstarts per month, adding up to a whopping capacity of 50.000 waferstarts per month.

The Dresden fabs will be brought into a new company of which the Advanced Technology Investment Company (ATIC) of Abu Dhabi will have the majority stake. The new company, preliminarily named 'The Foundry Company' will be launched in January 2009, Nothelfer explained. "This partnership has a long-term perspective," the production manager said.

The competiveness of the Foundry Company will be based on technology excellence, Nothelfer claimed. He said in terms of technology AMD always had an edge over the known Taiwanese foundries and potential future competitors. Acording to Nothelfer, AMD introduced all technology generations earlier or at the same time as the known large foundries. 45-nm for instance, the companies next goal, will go into volume production very soon at AMD while, among the competitors, only TSMC even has announced a roadmap for this technology node.

While the company currently is just one step away of entering the 45-nm volume production, it already produces first samples in 32-nm geometries. On the question about the lithography technology to be used for commercial production, Nothelfer said that currently there is no alternative to immersion lithography. "It is the only solution available. And with some additional tricks, it can be used for 32-nm as well as for 45-nm," he explained.

The Foundry Company will be competitive against Far Eastern foundries despite higher costs, Nothelfer said. "Given the high degree of automation in a semiconductor fab, labor costs are in the single-digit percentage range. Good engineering and a reliable team by far outweigh the influence of labor costs," the manager explained.