Advanced Micro Devices (AMD), long the distant number 2 manufacturer of computer processors after Intel, will this week open a new manufacturing plant that will more than triple its current capabilities when its fully up and running.
Its Fab 36 factory opens in Dresden, employing around 1,100 people at capacity and will produce chips made on 300mm silicon wafers.
It will take around three years from now for AMD to be at full capacity, but starting next year they'll be able to better compete with Intel. One example cited for AMD's drive for extra capacity is that Dell does not use AMD processors, stating their lack of scale to meet Dell's needs. This extra capacity should remove that issue with the No1 PC supplier.
Intel is also increasing their capacity by a further 15% as they introduce two new 300mm facilities. The real question is, will all this extra capacity from Intel and AMD just soak up increasing demand, or could it spark a price war starting in 2006?