Network Computing is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

AMD's High-Stakes Wager

The tech industry has a long history of David and Goliath stories. Yet few tech underdogs have started as far behind as Advanced Micro Devices Inc. did in its battle with Intel in the x86 chip market. And few have made such big gains so fast. In the past year, AMD beat Intel to the market with 64-bit x86 technology and with dual-core server chips. Those advances have paid off in substantial market gains.

In June, AMD chips were in only 20% of desktop PCs sold in the retail market. In September, AMD for the first time surpassed Intel, capturing 52% of that market, according to research firm Current Analysis.

Now AMD is making its biggest bet yet--spending $2.5 billion, or half of its 2004 revenue, to build a chip plant to substantially increase its manufacturing capacity. It's a gamble many believed not too long ago that the company wouldn't be able to afford. But AMD now believes its investment has set the stage for a major breakthrough in 2006 and beyond.

"We made progress at leaps and bounds in every quarter in 2005," says Hector Ruiz, chairman, president, and chief executive of AMD. "The perception of the company in the world has been elevated."

amd factory

AMD's Fab 36 plant in Dresden, Germany, will let the chipmaker increase processor production.

Greater Capacity
AMD earlier this month officially opened Fab 36, a processor manufacturing plant in Dresden, Germany. The plant gives AMD the ability to produce a much greater volume of processors than it could before. Fab 36 demonstrates that AMD has the wherewithal to be a long-term player in the microprocessor market. Not only will the plant provide much-needed leading-edge capacity, AMD believes it will be able to use Fab 36 to demonstrate that it has implemented greater manufacturing flexibility than Intel by having the ability to adjust its manufacturing processes on at least a quarterly basis using what it calls an automated-precision-manufacturing model, a way of introducing innovation into the manufacturing process more quickly.

  • 1