Advanced Micro Devices notified about the European Union Commission’s approval of investment aid for its next-generation microprocessor wafer facility, AMD Fab 36, in Dresden, Germany.

The Federal Republic of Germany and the Free State of Saxony are providing investment allowances and investment grants of up to approximately €545 million – the highest benefit possible under the grants and subsidy program.

“We greatly appreciate the EU Commission’s decision in favor of AMD. With this approval, our new project has passed a key financial milestone as we begin the process of building, equipping and ramping the new fab. With the support of the EU and Saxony, AMD Fab 36 will build upon our outstanding track record in Dresden with AMD Fab 30 and further extend AMD’s leadership in manufacturing and technology,” said Bob Rivet, chief financial officer.

AMD broke ground on its 300mm manufacturing facility on November 20, 2003. The new facility, named AMD Fab 36, is part of AMD Fab 36 LLC & Co. KG and is being built in Dresden, Germany, adjacent to AMD Fab 30.

The Fab36 will cost about $2.4 billion in total. AMD gets $1.5 billion as help, which is $500 million as subsidies, grants, etc, $700 million is a loan and remaining $300 as an equity from 2 partners - Saxony and some European investors. The rest $900 million are expected to come from AMD itself.

AMD projects the building to be completed in late 2004. The company will start the installation of equipment just before the end of 2004 and plans to start qualifications of the factory in the late 1H 2005. AMD Fab 36 is expected to be in volume production in 2006. The new facility will employ roughly 1000 people.