Intel to Build New Arizona Plant

Construction on the $3 billion project will start immediately.
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plans to build a new 300mm wafer fabrication facility at its site in Chandler, Ariz., and the chipmaker said construction on the $3 billion project is set to begin immediately.

The new factory will start producing microprocessors in the second half of 2007.

"This investment positions our manufacturing network for future growth to support our platform initiatives and will give us additional supply flexibility across a range of products," Paul Otellini, Intel's CEO, said in a press release.

When it's completed, the plant will be Intel's sixth 300mm wafer facility. The structure will be about 1 million square feet, with 184,000 square feet of clean-room space. The project will create up to 1,000 new Intel jobs at the Arizona site over the next several years.

The company has an additional 300mm fab under construction in Arizona that's scheduled to begin operating later this year and an expansion in Ireland scheduled to start in the first quarter of next year.

Manufacturing with 300mm wafers dramatically increases the ability to produce semiconductors at a lower cost compared with more widely used 200mm wafers. The total silicon surface area of a 300mm wafer is more than twice that of a 200mm wafer. The bigger wafers lower the production cost per chip while diminishing overall use of resources.

Separately, Intel said it will invest $105 million to convert an existing inactive wafer fab in New Mexico to a component temporary test facility. Shares of Intel were down 23 cents to $26.52.