AMD goes to Dresden for new 300mm fab
External financing is expected to include up to $700mn in loans from a consortium of banks with an 80% residual guarantee from the German and Saxony governments. Grants and allowances of $500mn are expected from the local and federal governments (pending European Commission approval). Equity funding of $320mn is due from Saxony and a group of European investors led by M+W Zander. AMD and other potential partners will provide the balance.
"Positive customer response and increasing momentum for our AMD64 processors make it clear that the time is right to expand our manufacturing capacity in order to effectively meet future demand," says Hector Ruiz, president and CEO at AMD.
Fab 36 will use the third-generation of AMD's patented automated manufacturing capabilities, known as Automated Precision Manufacturing (APM 3.0).
"AMD's investment in Dresden is one of the largest in East Germany since unification in 1990," says minister president of the Free State of Saxony, Professor Georg Milbradt.
"By building in Dresden, we are able to leverage the outstanding capabilities of our existing AMD Fab 30 and gain access to the most substantial government-backed financial incentives package available to us," comments Bob Rivet, chief financial officer at AMD. "We expect AMD Fab 36 will cost approximately $2.4bn over the next four years. We have arranged external financing and government support of approximately $1.5bn during that period."