AMD Spending $2.5B To Expand

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The processor company plans to meet growing demand for its chips by investing $2.5 billion in its operations in Germany. AMD (AMD) will make that investment over a three year period in order to increase the production of its 300mm wafers, the company announced. The transition from 200mm to 300mm allows for more than twice as many processors on a wafer. The move comes in the wake of AMD's successful bid to gain a toehold in global PC leader Dell's (DELL) business. AMD and Dell recently disclosed a deal that will place AMD processors in Dell servers. It is the first time Dell has chosen to use chips by a manufacturer other than long-time supplier Intel (INTC). "As global demand continues to rise for AMD products, we are scaling our manufacturing capacity intelligently to meet our customers’ growing needs," said Hector Ruiz, chairman and chief executive officer of AMD. "These strategic investments highlight how significant Germany and Europe are to the future of AMD competitiveness." That strategy will see AMD match Intel in producing the 300mm wafers for its microprocessors. AMD produces 200mm wafers at the Dresden plant where the investment will take place. Production of the 200mm wafers will ramp down through the second half of 2007. AMD expects to have Dresden running at full capacity of 45,000 wafer starts per month by the end of 2008. On another part of the globe, AMD and two companies, Shenzhen Domain Network and Huawei Technologies, announced in Beijing that they would collaborate on online gaming in China. Shenzen, a leading online game carrier, will implement an AMD-based Telecommunications Standard Service Platform from Huawei Technologies. That arrangement aims at capitalizing on the popularity of online gaming in China, where thousands of gamers already participate in games and look forward to the next releases of titles. AMD is no stranger to gaming in the US, where its processors tend to find their way into very high-end PCs designed to play games with high detail and fast online response.

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[SOURCE]
http://www.internetfinancialnews.com/insiderreports/featured/ifn-2-20060530AMDSpending25BToExpand.html>

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