AMD Receives $683M for Dresden Plant

Cocooner writes "Infoworld has an article explaining how AMD received $683 million in grants from Germany and the state of Saxony for its next-generation microprocessor wafer facility. The new plant will be located in Dresden, adjacent to Fab 30 and will be called Fab 36. It will be the first AMD 300mm manufacturing facility."

Re:AMD 300mm?

[scifience]

No, it isn't a typo. They are talking about the size of the silicon wafer, not the processor itself. If you had RTFA, you would have known that the whole point of this is that is more cost effective to use bigger silicon wafers since more processors can then be made out of a single wafer.

Re:300mm?

[Anonymous Coward]

Answer from another story of Infoworld [infoworld.com]:

"The facility, named AMD Fab 36, will produce chips on 300 millimeter wafers and is expected to employ 1,000 people. Full volume production is scheduled for 2006, the Sunnyvale, California, company said."

Re:AMD 300mm?

[garethw]

I know, it's a typo...

Actually, it isn't. 300mm is the diamaeter of a complete wafer, from which multiple die are cut.

Re:Taxes...

[Sumocide]

Dream on, corporations of their size hardly have to pay taxes in Germany. Especially in the former GDR.

Re:AMD 300mm?

[Afrob]

And because of their size these are called 'Pizza Wafers'.

The die size of an Athlon XP is about 129mm^2, so at 3/4 surface usage about 410 Athlons would fit on a single wafer. Must be really cheap to produce those things...

Mod down

[imsabbel]

The parent just pulled "facts" out of his ass.
Opteron X -> isnt planed
5Ghz Fsb -> Opteron has no fsb
500mm -> even intel says that the next 5 years they wont TRY creating bigger than 300mm wafers,
65nm -> 2008 65nm will be old stuff...

Re:In Socialist Germany

[JanneM]

Of course, they aren't really giving money away to AMD. It is rather in the form of tax rebates and the like - it is not losing any money, just not bringing in as much as if AMD had paid full rates on everything (and the reality is that likely AMD would have gone elsewhere and not paid a dime).

wafer size

[Elracim]

This page explains the difference between wafer sizes pretty well.

www.tomshardware.com/cpu/20040201/prescott-05.html [tomshardware.com]

Re:ROI?

[Uber Banker]

No. You must be unaware of the 'multiplier effect' in economics, you can read up here [wikipedia.org]. Basically, if there is surplus productive capacity in a economy (which Germany surely has) a stimulative effect at employing that surplus will have spill over benefit to everyone (chip makers need bakers, burger flippers etc) economically 'near' them. The money goes round the economic circle and multiplies.

As Germany is in a depressed economic position (lots of deflationary pressures) such fiscal stimulus is useful (this was the argument for the Bush tax cuts - but that was probably unnecessary in the US (and was not 'directed' to undercapacity areas of the economy), but is much more necessary in Germany), not that this is a cure-all as German is suffering really bad structural problems too.

Then there is the money multiplier concept (a not very good definition here [digitaleconomist.com]) which explains how money increases as the definition broadens - is cash money, but the amount of money on deposit is greater than all cash in circulation and in bank tills This is a seperate issue and not relevant to this discussion, but a fine demonstation that of all things in life, money is one ofthe finest examples of something which multiplies.

Old news, and they got more

[Rufus211]

Wow this is old news. We knew this when they first announced [xbitlabs.com] the plant. And here are some more figures:

AMD has arranged external financing and government support of approximately $1.5 billion during that period. The external financing is expected to include up to approximately $700 million in loans from a consortium of banks, including an 80% residual guarantee from Germany and Saxony, approximately $500 million in anticipated grants and allowances from the Germany and Saxonian governments (pending European Union Commission approval), and up to approximately $320 million in equity funding from Saxony and a group of European investors led by M+W Zander.

Re:What about returns ??

[Anonymous Coward]

> Eastern Germany suffers from extreme
> unemployment (up to 20% in some areas)

Actually, the average unemployment is just below 20%.

Re:ROI?

[RedSynapse]

no, but the other 2billion Euro's that AMD is spending will stay in the German ecconomy

I really doubt that. Most of that 2 billion will be going to companies like Applied Materials [yahoo.com]. Sure there will be local contractors involved in constructing the buildings (i.e. the grunt work), but all the really expensive bits that go inside will come from foreign multinationals.

What Saxony is really paying all that money for is the creation of jobs. When you do the math 600k per job ain't all that bad. Lets say the average salary will be 50k per year, so in that case you could argue that "the local economy" will make that back in 12 years. The EU actually has rules against these kinds of state subsidies, but because the Fab is being built in former East Germany it's being exempted.

Re:Possibly illegal too

[jarran]

Governments can, in certain circumstances get permission from the EU for state aid to companies. (Not that I have any idea what those circumstances are. :) )