You can't keep Advanced Micro Devices (NYSE:AMD) down. The distant runner-up to Intel (NASDAQ:INTC) keeps fighting, kicking, and landing punches, launching faster microprocessors than its rival, taking a lead in certain flash memory sales, and today announcing it'll build a $2.4 billion state-of-the-art chip factory in Germany, largely financed by others.
The Dresden manufacturing facility will make microprocessors on 300-mm wafers, the largest available, increasing production capabilities for the popular AMD64 chips. The plant is expected to reach volume production in 2006 in a bid to meet increasing demand for AMD processors.
Of the $2.4 billion price tag, $1.5 billion has been externally financed, including approximately $500 million in German government grants and allowances and $700 million in bank loans, 80% of which is covered by credit guarantees from the state government of Saxony.
The remaining financing -- approximately $900 million -- will come from AMD and future partners. AMD had $1.1 billion in cash and long-term investments as of June 29, and $1.58 billion in long-term debt.
Dresden, where AMD and Infineon (NYSE:IFX) already have operations, won the factory bid over competitor East Fishkill, NY. (A name like that makes even Dresden sound sunny.) A new plant built largely on someone else's dime is the second boost to AMD this week, the first being a new partnership with Sun Microsystems (NASDAQ:SUNW). And there's a third.
In separate but related news, according to iSuppli, Intel was surpassed as the number one seller of flash memory chips for the first time. Samsung and Toshiba took the market-share lead on strong sales of removable flash for digital cameras and other small products. Intel fell to fourth place. In third? Advanced Micro Devices and Fijitsu joint venture, FASL.
Intel did, however, maintain the top spot for NOR flash memory, which is used in mobile handsets, and in its analyst meeting today, Intel's CEO celebrated increased business demand for microprocessors, projecting double-digit sales and earnings growth in quarter four. Industry-wide flash sales rose 27% in the third quarter to $3.1 billion.
Intel and AMD are among the most active discussion boards in our Fool Community -- join in. Jeff Fischer owns shares of Intel.
