AMD Plans Second Test Plant in China

Computer chipmaker AMD said Thursday it is drafting plans for a second test, mark and package (TMP) facility in China.

The 11,000 square meters building is expected to cost $100 million to build and will be located in China’s Suzhou Industrial Park.

That is right next to the Sunnyvale, Calif., company’s FASL Flash memory TMP facility, which AMD built back in 1995. FASL is a partnership between AMD and Fujitsu that designs, builds and markets the Spansion brand of memory.

AMD said the new plant is being built to test, mark and package both seventh-generation microprocessors and, at a later stage, eighth-generation microprocessor products.

With one of the world’s hottest chip markets, an abundant labor force and world-class engineering talent, Karen Guo, AMD China corporate vice president and general manager, said China is a natural choice for AMD’s microprocessor manufacturing.

“Even more important, building this TMP facility in Suzhou allows us to be even closer to our PRC customers, and enhances AMD’s competitiveness in this important Chinese marketplace,” Guo noted in a statement. “Our customers — including local OEMs and others here in China — can have even faster, easier access to AMD microprocessor products right here in the region.”

Work crews are expected to break ground on the new facility by mid-year and open the plant at full strength sometime in the fourth quarter of 2004. AMD expects to hire some 300 employees over the next several years for the project.

The expansion plans come as AMD sees a strong surge in interest in both its microprocessors and its Flash memory products. Earlier this week, the company reported first-quarter sales of $1.24 billion, up 73 percent compared to the first quarter of 2003 and 3 percent from the fourth quarter of 2003.

The company is also celebrating the one-year anniversary of the launch of its 64-bit Opteron processor at an event in New York next week.

The company also said its Flash memory sales grew during the first quarter due to strong performance in the wireless and embedded markets and increased shipments of products based on MirrorBit technology. Geographically, sales were especially strong in Asia-Pacific and the Americas.

Going forward, AMD said it will be beefing up production of its next generation 90-nanometer Opteron and Athlon chips in the second quarter, which it hopes will turn a cash profit in the third quarter of 2004.

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