Wafers, Wafers Everywhere
Advanced Micro Devices (AMD - Annual Report) has been gaining share in the microprocessor market from Intel, so it stands to reason that they should be increasing their production capacity faster than the overall semiconductor industry or PC industry’s revenue growth - both of which are running about 7 percent annually. However, this story sounds like they are getting ahead of themselves:
EETimes.com - Heard on the Beat: AMD mulls New York fab
Officials from Advance Micro Devices Inc. (AMD) were spotted in New York again to evaluate the state for a possible fab.
New York has an uphill battle to lure AMD. So far, AMD has build its advanced fabs in Germany. The company recently said it will invest $2.5 billion in Germany, adding a new 300-mm fab to replace an existing 200-mm facility that will be closed. AMD said the expansion will quadruple its processor production here within the next 30 months.
Quadrupling production in 30 months equates to 72 percent annual growth, or approximately 10x the pace of end-market demand. Intel also believes it can grow at least at the industry growth rate and is proceeding with its own aggressive production schedule. The price war between these two appears far from over.
Meanwhile, semiconductor makers of all stripes continue to aggressively expand despite the fact that supply is outpacing demand.
Spansion confirmed plans that it expects to invest $1.2 billion over three years in the SP-1 wafer fab in Aizu in the Fukushima presecture area of Japan.
The memory chip company plans to begin production of 45-nanometer devices at the facility by mid-2008, a spokeswoman at the company said. Spansion may also use the facility to manufacture 65nm devices.
Disclosure: William Trent has a long position in SMH.
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