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AMD and Chartered Semiconductor Manufacturing on Tuesday announced they have entered into sourcing and manufacturing technology agreements whereby Chartered will implement under license portions of AMD’s Automated Precision Manufacturing (APM) software suite and become an additional manufacturing source of AMD64 microprocessors.

AMD Outsources Production

As the latest processors from Advanced Micro Devices – AMD Athlon 64 and AMD Opteron – face high demand across the industry and is likely to continue growing, AMD needs higher supply of its chips in order to gain market share in future. Chartered, who has fabrication technology similar to AMD, will begin integrating AMD’s APM into Fab 7, its 300mm wafer fabrication facility in Singapore, starting in the fourth quarter of 2004. AMD plans to have Chartered begin production in 2006.

“Chartered can produce chips compatible with either the IBM or the AMD 90nm process in its Fab 7 in Singapore. This new facility, Chartered’s first 300mm fab, will begin pilot production later this quarter, and should be in full production by mid-2005. Chartered expects to have capacity in place for 9000 wafer starts per month by the end of 2005, and 15 000 WSPM twelve months later. It’s not at all clear how much, if any, of this capacity AMD will tap when its 90nm processors are fully qualified in Fab 7 at the end of 2005,” principal analyst with Insight 64 Nathan Brookwood wrote in his short report titled “AMD Sets Sail on Chartered Waters”.

APM Brings Costs Down

In order to ensure higher yield and lower costs of AMD64 production at Chartered, AMD will license its Automated Precision Manufacturing to Chartered. AMD’s APM suite is made up of over 300 patented and patent-pending technologies that provide for dynamic, real-time adjustments to production processes. APM helps reduce time-to-yield on new technologies, improve overall wafer yields and decrease manufacturing costs.

Although AMD will undoubtedly have higher costs for the wafers it sources from Chartered, as opposed to those coming from its own Fab 36, it has used its Automated Precision Manufacturing (APM) technology to soften the blow. AMD will license its proprietary APM software, the secret sauce that allows the company to optimize the performance of its Dresden fab, to Chartered. Chartered will be allowed to deploy the AMD technology for all Fab 7 production, including that done for AMD, but excluding that done for products that compete directly with AMD’s offerings in the x86 or flash markets. In exchange for sharing its APM technology, AMD gets more favourable pricing for the wafers it buys from Chartered, and it can expect higher yields from those wafers than would be expected if Chartered lacked access to the APM management tools,” Mr. Brookwood said.

Serving as a fab’s “central nervous system,” APM forms an integrated fabric of communication and control linkages with the hundreds of tools throughout the plant. This sophisticated and highly integrated data infrastructure constantly monitors the health of microprocessors in production by collecting and analyzing information from the tool-sets as wafers enter and exit them for processing.

Using proprietary real-time analysis algorithms, APM automatically and consistently recommends changes to the complex recipes used within each tool. In this way, APM optimizes the process for each set of materials, based on the unique history and health-state of both the tools and the materials, in order to ensure the final chips perform to targeted specifications and are defect free.

AMD-Chartered Future Beyond 90nm – Unclear

Although the AMD/Chartered foundry arrangement focuses entirely on 90nm SOI production, we would not be at all surprised to see it evolve over time to include 65nm technology as well. Chartered is working with IBM on 65nm development, as is AMD. IBM and AMD both expect that their processes will be “fully converged” when they move to 65nm technology, Nathan Brookwood said.

This is not the first time when a possibility of manufacturing collaboration between Advanced Micro Devices and other semiconductor makers is being discussed. In mid-2002 AMD and UMC said they would collaborate over outsourcing of AMD chips.  In early 2003 a representative for AMD said that while the company wanted to be the main source for its processors, it was possible that AMD would outsource part of the manufacturing activities and IBM would be included on the list of potential partners the Sunnyvale-based semiconductor company might evaluate. In mid-2003 a report about IBM building a fab for AMD hit the web, but none officials confirmed this. Recently an analyst firm said AMD could collaborate with IBM to make AMD64 products.

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