Intel Corp. on Monday announced plans to build a new 300mm wafer fabrication facility at its site in Chandler, Arizona. The new factory, designated Fab 32, will begin production of microprocessors in the second half of 2007 on 45nm process technology. Construction on the $3 billion project is set to begin immediately.

“For Intel, manufacturing is a key competitive advantage that serves as the underpinning for our business and allows us to provide customers with leading-edge products in high volume. The unmatched scope and scale of our investments in manufacturing help Intel maintain industry leadership and drive innovation,” said said Paul Otellini, Intel CEO

When completed, Fab 32 will become 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 1000 new Intel jobs at the Arizona site over the next several years. During the construction phase, more than 3000 skilled trades people will be hired to work on the project.

“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,” Mr. Otellini added.

Intel currently operates four 300mm fabs that provide the equivalent manufacturing capacity of about eight 200mm factories. Those factories are located in Oregon, Ireland and New Mexico. The company also has an additional 300mm fab currently under construction in Arizona (Fab 12) scheduled to begin operations later this year, and one expansion in Ireland (Fab 24-2) scheduled to begin operations in the first quarter of next year.

Manufacturing with 300mm wafers 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 225% more than that of a 200mm wafer, and the number of printed die (individual computer chips) is increased to 240%, according to Intel. The bigger wafers lower the production cost per chip while diminishing overall use of resources, for instance, 300mm wafer manufacturing uses 40% less energy and water per chip than a 200mm wafer factory.

Separately, Intel said it will invest $105 million dollars to convert an existing inactive wafer fab in New Mexico to a component temporary test facility. The project will provide additional test capacity to the company’s factory network for the next two years and will result in an additional 300 jobs at the New Mexico site during that period.