The manufacturing group of Advanced Micro Devices Inc. heaved a huge sigh of relief when CEO Hector Ruiz announced Nov. 20 that the company finally had decided to build its 300-mm Fab 36 in Dresden, Germany.

Had AMD's search for a partner led it (as once planned) to United Microelectronics Corp. (Hsinchu, Taiwan), UMC's factory-productivity engineers would have controlled the approach to 300-mm factory automation, with AMD as the junior partner. "That would have been a real struggle," said Tom Sonderman, an AMD manufacturing director based in Austin.

AMD engineers have worked hard to develop the company's automated precision manufacturing technology, which promises to bring wafer-level and die-level process control, including the ability to pass process information from tool to tool. AMD has had good inputs to its factory productivity drive, Ruiz said, from the 2,000 people who work at AMD's existing Fab 30 in Dresden.

Germany offered a whopping $1.5 billion in subsidies, loan guarantees and equity investments to ensure Fab 36 got built in Dresden. The government is trying to repair the economic damage to the eastern portion of Germany, where Dresden is situated, caused by nearly five decades of Communist rule.

That level of German support makes Fab 36 more of a German government fab than an AMD fab. AMD will spend $900 million at Fab 36, most of it coming from the normal capital budget to equip the facility with tools as demand ramps.

"AMD needs to get cracking if it is going to have Fab 36 in production 24 months from now," said analyst Nathan Brookwood, of Insight 64 (Saratoga, Calif.). "That is a reasonably short timetable for bringing up a new process [65-nanometer] at a new wafer size."

AMD's Sonderman said the company, with financial support from the National Institute of Standards and Technology, has been working on the security aspects of e-diagnostics, which will let tool vendors remotely monitor the state of individual tools in the Dresden fab.

With its Opteron and Athlon 64 processors, its support from the German government and its improving manufacturing prowess, AMD appears to have reached a new level of confidence in its future. Now the company needs to turn all of that into black ink on its bottom line.

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