Advanced Micro Devices, the world’s second largest maker of x86 microprocessors, said in an interview that more than a half of the company’s new Fab 36 production will be made using 65nm process technology. Unfortunately, as the company does not indicate any numbers, it is unclear what percentage of the firm’s chips will be made using thinner production technology in less than a year.

“We expect that 65nm wafer starts will account for more than 50% of total production at Fab 36 by early 2007, and we expect substantial conversion to 65nm by mid-2007,” said Damon Muzny, a spokesman for AMD, in an interview with AMDZone web-site.

Currently AMD’s recently launched Fab 36 that is based in Dresden, Germany, produces chips using 90nm process technology. And while the fab was constructed to produce up to 13 thousand 300mm wafers per month, it is unclear what percentage of its theoretical capacity is utilized today and will be used by early 2007. Furthermore, AMD indicated that by early 2008 the capacities of the Fab 36 will reach 20 thousand 300mm wafer starts per month.

It took AMD eleven to twelve months to transit its Fab 30 from 130nm process technology to 90nm process technology starting from the first shipments and ending with appropriate announcement. Currently it is uncertain when AMD plans to start ramping up its 65nm products: once it said 65nm production will start “by the end of 2006”, another time it indicated that it would start “in the second half” of 2006, therefore, it cannot be estimated when the firm fully transits to 65nm fabrication process.

While AMD has been executing well with its production facilities expansion in the recent quarters, Intel is still ahead of the company both in terms of manufacturing plants and process technologies. For instance, Intel promised that by mid-2006 half of its processors on the market would be made using 65nm process technology. Moreover, Intel intends to start transition to 45nm process technology in H2 2007, about time AMD expects to “substantially” convert its Fab 36 to 65nm.

In the interview Mr. Muzny admitted that AMD will be about a year behind of Intel with its 45nm process technology: “we are on track for 45nm production in Fab 36 by mid 2008,” he said. Nevertheless, he believes that AMD’s manufacturing efficiency and constant manufacturing processes improvements will allow the chipmaker to stay competitive with its arch-rival.

“We have historically sustained a competitive cost structure even though we start transitions after our competitor because we consistently complete those transitions very quickly. Now, this is partly because of our smaller size, but also because of our very high levels of operational efficiency. The end result is we fully convert our manufacturing to the next generation faster. This gives AMD more freedom to begin transitions when it makes the most sense for our customers and for our business,” Mr. Muzny stated.