Advanced Micro Devices will definitely begin to manufacture chips using 300mm wafers and 65nm process technology according to Soitec, a maker of wafers. The company has signed a contract with AMD to supply wafers for the new production fab.

“Soitec and Advanced Micro Devices have signed an SOI wafer supply contract worth a total of more than $150 million for the calendar year 2006. This most recent contract is part of the multi-year agreement announced last year for the long-term supply of 200mm and 300mm Unibond SOI wafers,” a statement by Soitec says.

Soitec manufactures wafers for AMD using its Smart Cut process and has signed a long-term supply agreement with the world’s second largest maker of x86 processors in 2005.

Last year AMD signed a $50 million agreement with Soitec to supply 200mm and 300mm Unibond wafers, but afterwards rejected plans to commence volume manufacturing using 65nm process technology at its Fab 36, even though it decided to use 300mm wafers for 90nm production lines at the same manufacturing facility.

Manufacturing with 300mm wafers increases the ability to produce semiconductors at a lower cost compared with more widely used 200mm wafers according to the world’s largest maker of microprocessors Intel Corp. The total silicon surface area of a 300mm wafer is 225% higher compared to 200mm wafer, and the number of printed die (individual computer chips) is increased to 240%. The bigger wafers lower the production cost per chip while diminishing overall use of resources, as manufacturing with 300mm wafers uses 40% less energy and water per chip.