Advanced Micro Devices to Build Wafer Plant in Germany

Advanced Micro Devices Inc. said Thursday that it plans to invest $1.9 billion in a plant in Germany that would nearly double its share of processors for the personal computer market.

Company President Jerry Sanders, taking aim against market leader Intel Corp., said the company intends to invest $1.9 billion in the Dresden factory. It hopes to launch production in 1998 with a work force of 1,400.

“We want to become the world’s biggest manufacturer and become active globally,” Sanders told a news conference in Dresden.

The project will be aided with a $552-million grant from German regional governments and a $690-million credit.

It should help the company increase its market share of processors for the personal computer market to 30% in the next three years from about 17% now, Sanders said.

The plan calls for the construction of a 875,000-square-foot semiconductor wafer fabrication facility and the establishment of a design center.

The wafer fabrication facility will include about 90,000 square feet of clean-room space for the manufacture of future generations of Microsoft Windows-compatible microprocessors and other high-volume products.

The plant will produce silicon wafers and processors for the European market.

The move is the latest in the rivalry among U.S. semiconductor makers who are seeking cheaper production abroad, closer to their markets.

Intel said late last month that it plans to build a factory in Shanghai.

Advanced Micro’s decision to locate a plant in Dresden is a major victory for the area, which is trying to turn itself into Germany’s high-tech region after decades of communist rule.

Only last month, a $1.86-billion Siemens plant opened in the area. It employs 1,400.