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AMD Spin-Off GlobalFoundries Breaks Ground On Fab

The 32-nm chip manufacturing facility is expected to create more than 1,400 high-tech jobs with an annual payroll of more than $88 million.

GlobalFoundries, the chip-manufacturing spin-off of Advanced Micro Devices, started construction Friday on a semiconductor plant in upstate New York.

Fab 2, located at the Luther Forest Technology Campus in Saratoga County, is scheduled to begin production in 2012. The fabrication facility is the "largest public-private sector industrial investment" in New York, according to AMD.

"Fab 2 represents the culmination of AMD's multi-year vision to bring a leading-edge semiconductor manufacturing facility to the United States," Dirk Meyer, AMD president and chief executive, said in a statement.

The facility will be a 300-millimeter semiconductor manufacturing plant designed for 32-nanometer technologies. The fab is expected to create more than 1,400 high-tech jobs with an annual payroll of more than $88 million.

GlobalFoundries, headquartered in Silicon Valley, Calif., is a joint venture of AMD and Advanced Technology Investment Co., formed by the Abu Dhabi government. Along with the construction of Fab 1, GlobalFoundries is expanding its Dresden, Germany, manufacturing capacity by bringing a second facility online late this year.

Called Fab 1, the Dresden complex will dedicate one of its two facilities to making 45-nm chips, which AMD is in the process of transitioning its products to, and the other to 32-nm processors. The numbers refer to the size of the microprocessor circuitry. The smaller the size, the more transistors can be placed on a piece of silicon, which translates into much higher performance without increasing power consumption. The move to 32-nm is seen as the next big jump in processor performance. A nanometer is a billionth of a meter.

GlobalFoundries, which employs 3,000 people worldwide, is AMD's main manufacturer and the result of AMD spinning off its manufacturing facilities to reduce expenses and focus resources on chip design in competing against larger rival Intel. AMD this week reported its 11th consecutive quarterly loss as the company continues its struggle to reach profitability that has so far been blocked by intense competition from Intel, the economic recession, and the billions of dollars in charges related to the 2006 acquisition of graphics chip maker ATI Technologies.

Along with building AMD chips, GlobalFoundries plans to also produce semiconductors for other companies. How well it serves AMD in competing against Intel remains to be seen. Intel in February said it would invest $7 billion in the United States over the next two years to upgrade existing fabs for production of 32-nm technology.

Intel plans to start making 32-nm products in the fourth quarter of this year, while AMD expects GlobalFoundries to do the same by the middle of next year. The manufacturer, however, hasn't disclosed a production timetable.

InformationWeek Analytics has published an analysis of the current state of mainframes. Download the report here (registration required).

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