Advanced Micro Devices Inc (AMD)

[KeithDust2000]

AMD delays some chips, plans factory

By Chris Kraeuter, CBS.MarketWatch.com
Last Update: 2:21 PM ET Nov. 6, 2003


SAN FRANCISCO (CBS.MW) - Advanced Micro Devices delayed introduction of some chips produced with next-generation process technologies and announced plans Thursday to build a $2 billion to $3 billion production plant.


AMD (AMD: news, chart, profile) executives spoke on Thursday at an annual analyst meeting in Sunnyvale, Calif. Much of the meeting was spent drawing a distinction from AMD today vs. AMD only one year ago.

"By any metric, we've made tremendous progress," said CFO Bob Rivet. He pointed out progress on streamlining AMD's supply chain, capital structure and cost base.

Shares declined by a penny on Thursday afternoon to $16.99.

AMD said its manufacturing troubles are behind it and it is delivering the microchips customers want.

Nonetheless, AMD pushed out by a few months the production schedule for chips produced with 90 nanometer process technology to the second half of 2004. The company had previously targeted a transition to 90 nanometer production in the first half of 2004.

The measurement refers to the width of wires etched onto microchips. A nanometer is a billionth of a meter.

Most of the company's chips are currently made with 130 nanometer technology. Chips made with tighter process technology run more efficiently.

"We wanted to project a more conservative schedule so our customers could have confidence that we could follow through and deliver our 64-bit chips on schedule," said Bill Siegle, senior vice president of technology.

Siegle also alluded to AMD's plans to manufacture chips on 300 mm wafers, which are larger and more cost efficient for making chips. He said the company has a site selected for a 300 mm factory and that more details could be announced later this quarter.



The cost for a 300 mm factory is extremely high, at between $2 billion and $3 billion. AMD operates its own factories, but it also outsources some production to foundry partners.

Earlier this year, AMD and Taiwanese foundry United Microelectronics abandoned a plan to jointly build a 300 mm factory.

As this plan fell apart, AMD linked with IBM and its foundry operations to help develop future chips based on 300 mm wafers and at process technologies of 65 nanometers and 45 nanometers.

AMD's current product roadmap calls for 300 mm production using a 65 nanometer process in 2005 or 2006.

http://www.marketwatch.com/news/print_story.asp?print=1&guid={24EAAF92-B92B-4A4B-863E-39A916F0FA....

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Well, AMD has been saying 2H/04 for quite some time now (in interviews, at the conference call etc.), nevermind.