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Fujitsu AMD builds plant
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July 19, 2000: 2:52 p.m. ET
Venture of chipmaker, Japan partner starts construction on $1.5B plant
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NEW YORK (CNNfn) - Fujitsu AMD Semiconductor Ltd., a joint venture of American semiconductor maker Advanced Micro Devices and Japanese electronics company Fujitsu Ltd., broke ground Wednesday for a new manufacturing plant in Aizu-Wakamatsu, Japan, which would produce flash memory chips.
The total cost of the 100,000 sq. ft. facility has been set at roughly $1.5 billion, and it is expected to start turning out chips during the second half of 2001. The company did not disclose whether they would be recruiting new employees for the plant.
When it is fully equipped and operating at peak capacity, the new facility will be capable of producing 7,500 eight-inch silicon wafers per week.
Flash memory -- which holds data even when the devices they are used in are powered down, unlike the memory used in personal computers -- has been in short supply amid soaring demand for devices such as wireless telephones, set-top boxes and handheld information appliances.
Industry observers expect the demand for flash memory to continue to outstrip supply for some time.
 "With demand for our leading-edge flash memory products exceeding capacity, AMD and Fujitsu have committed to an aggressive expansion of production capacity to meet high forecasted demand," said Walid Maghribi, group vice president and general manager of AMD's memory division.
"With worldwide demand for flash memory products, measured in annual bit consumption, growing at a 100 percent compound annual rate since 1994, we believe we must continue a rapid expansion of production capacity to support our customer's long-term need," Maghribi added.
In order to keep up with demand, Maghribi said the joint venture must continue to double its production capacity each year for the next three years.
AMD (AMD: Research, Estimates) shares slipped 2-1/2 to 88-1/2 in New York Stock Exchange trading Wednesday.
The Sunnyvale, Calif.-based company is expected to report its most recent quarterly earnings results after the closing bell. Analysts are expecting the company to turn a profit of $1.13 per share. 
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